Crouching Tiger: Franchise Regulators Pounce on Franchisors
The following article appeared in the March/April, 2010 issue of Business Law Today.
California Pizza Kitchen Announces New Franchise Partnership with USC Hospitality
DWT helps bring client California Pizza Kitchen to the University of Southern California:
www.marketwatch.com/story/california-pizza-kitchen-to-open-at-the-university-of-southern-california-2010-02-18?reflink=MW_news_stmp
10 Stress-Reducing Tips for Updating Franchise Disclosure Documents and Renewing State Registrations
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.
Structuring Licenses to Avoid the Inadvertent Franchise
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)
