Hospitality Law Blog : Hospitality Lawyer & Attorney : Davis Wright Tremaine Law Firm : Hotel & Restaurant Law, Employment Issues

By Sheila Fox Morrison

AFC Enterprises has asked the court to confirm that it may continue to use the POPEYES name after its licensing agreement with Hearst Corp., which owns the rights to the Popeye the Sailor cartoon character, expires.

The complaint reads: “The Agreement was never intended to and never has restricted AFC’s ability to use the name POPEYES® for its restaurant services as evidenced by paragraph two of the 2009 Amendment to the Agreement, which states: “WHEREAS, The Hearst Corporation, King Features Syndicate Division, (“Hearst”) and A. Copeland Enterprises, Inc. entered into an agreement dated March 11, 1976 relating inter alia to the use of the POPEYE cartoon in connection with POPEYES restaurants inside of the United States (the “Domestic Agreement”).” A plain reading of this agreement indicates that the Agreement only contemplated the use of the Popeye cartoon characters in connection with POPEYES® restaurants, therefore making a clear distinction between the Popeye cartoon character(s) and POPEYES® restaurants.

The case is AFC Enterprises Inc. v. The Hearst Corp. et al., case number 1:11-cv-04150, in the U.S. District Court for the Northern District of Georgia.

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By Rochelle Spandorf

Restaurant owners have many motivations for forming joint ventures; a primary one is to finance expansion.  These arrangements go by many names, including strategic alliances and corporate partnerships, and they join complementary strengths: a restaurateur may be looking for money sources or an experienced local partner to replicate the restaurant concept in an unfamiliar market or nontraditional venue.

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The following article appeared in Franchise Update on May 17, 2010.  Click here to view article.

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The following article appeared in the March/April, 2010 issue of Business Law Today. 

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Federal law requires all franchisors to update their franchise disclosure document (FDD) within 120 days after their fiscal year end (FYE). Likewise, state registrations must be renewed annually. Since most franchisors have a December 31 FYE, this is “renewal season,” the annual rite of racing the clock to meet updating and filing deadlines to prevent the lights from going out on franchise sales activities. Whether 12/31 or some other date is your company’s FYE, here are 10 stress-reducing tips for getting the job done right.

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Trademark Licensors Beware: Is Your License or Distribution Agreement Really a Franchise?

In Gentis v. Safeguard Business Systems, the defendant retained commissioned sales agents to solicit orders, follow leads, and provide customer service. The agents did more than just take orders, but lacked authority to enter into binding sales contracts with customers, never took title any goods, never bought inventory, seldom made deliveries, and did not handle billing or collection. When the relationship between the agents and Safeguard soured, the agents sued Safeguard for violating California’s Franchise Investment Act, the first franchise sales law in the country and the model for both the federal and state franchise sales laws that followed. In one of the few California appellate court decisions interpreting the statute, to Safeguard’s surprise, the court found that the relationship between the sales agents and Safeguard to be a franchise. (Full article)

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