Man Controlling Trade

The Basics of Federal Franchise Law

 If you’re immersed in the franchise world, you’ve likely heard of the Federal Trade Commission, or FTC, a federal agency that sets forth standards for franchises. However, in the day-to-day grind of running your business, you may not be familiar with just how the law impacts you, as a business owner, on a high level.

Although wading through legal jargon may not be enjoyable, the laws impose very real, tangible risks for business owners. As such, it’s vital to understand both the laws that impact your business and the penalties you may face if you (intentionally or inadvertently) run afoul. Continue Reading The Basics of Federal Franchise Law

For lease sign
For lease sign at industrial park. Focus on words.

A properly negotiated lease is critical to protecting your franchised business as well as the franchise network and brand. For franchisors, entering into a commercial lease agreement is an important step as the location out of which a business operates is critical to its success. Indeed, the adage “location, location, location” is much more than a cliché: Your business should be in a prime spot with heavy traffic and other quality (non-competing!) businesses nearby that attract patrons. Aside from location, there are other issues inherent in leasing, most notably, securing a lease that protects your ownership interest in your franchised business.

Franchisors often encounter these scenarios: changes in your business model, competition from nearby competitors, struggling franchisees, and a need to assign the lease to a new party.  Here are a few key considerations in negotiating and executing a lease agreement that will help you address these situations. Continue Reading Leasing Issues in Franchising

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California AB5 employee contractor

Perhaps you’ve heard about the California Legislature’s efforts to target misclassification of employees in the gig economy.

While the law passed in September 2019 had obvious impacts on companies like Uber and Lyft, it can also significantly affect franchisors. AB 5 increases the likelihood that a franchisee or franchisee’s employees will be viewed as employees of the franchisor, which dramatically increases the franchisor’s obligations to them.

Read on to learn how legislation in California may effect you.

Continue Reading Mitigating a Franchisor’s Risks under California AB 5

On Sunday, January 12, 2020, the U.S. Department of Labor (DOL) released the final version of its rule interpreting joint employer status under the Fair Labor Standards Act (FLSA), which regulates minimum wage and overtime.

The DOL adopted a four-factor test, which considers whether an alleged joint employer: Continue Reading DOL Raises Joint Employer Threshold

New NASAA FDD State Cover Pages for 2020

When you update your FDD for 2020, the first few pages of your will look very different than they have in the past.  NASAA has updated the state cover page requirements.  NASAA updated the cover pages with the intention of better helping franchisees understand and use the FDD.

Below are summaries of the changes to the 2020 state cover pages.  As you familiarize yourself with the changes, the new state cover pages may help you to more effectively and efficiently answer prospective franchisees’ questions about the content of your FDD.

Continue Reading New NASAA FDD State Cover Pages for 2020