Fox Rothschild Blog
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Fox Rothschild's Franchising & Distribution Practice is comprised of a diverse group of attorneys, including former in-house counsels to major international franchisors and a leading author on franchise law. We know the business and the law of franchising.
Fox Rothschild Blog
2M ago
If you own or operate a franchised restaurant, or are a franchisor of franchised restaurants, simply keeping your business operating smoothly is a lot of work. Food ordering, managing schedules and greeting guests, just name a few daily tasks, take time and effort. It’s easy for recordkeeping and tax planning to get placed on the ..read more
Fox Rothschild Blog
4M ago
Dewberry Engineers Inc. (“Dewberry Engineers”), a prominent engineering firm, has been locked in an on-again, off-again trademark dispute with a real estate development firm called Dewberry Group, Inc. (“Dewberry Group”) for nearly two decades. Now the dispute is going to the United States Supreme Court, which has agreed to hear Dewberry Group’s challenge to a $43 million profit disgorgement award a federal district court in Virginia entered in favor of Dewberry Engineers. Dewberry Group, Inc. v. Dewberry Engineers Inc., No. 23-900, 2024 WL 389540 (U.S. June 24, 2024) (granting writ of certior ..read more
Fox Rothschild Blog
6M ago
The Supreme Court issued a decision today in a case named Smith, et al. v. Spizzirri, et al., that has significant import for the franchise community. Many, if not the vast majority of, franchise agreements contain clauses requiring the arbitration of disputes. Franchise companies choose arbitration because they consider it to be more convenient, to yield consistent results, and to be cost effective.
Despite these advantages to arbitration, there remained some significant questions regarding what happens when a party tried to first bring its claims in federal district court as opposed to arbi ..read more
Fox Rothschild Blog
6M ago
By now you’ve probably heard that the Federal Trade Commission (“FTC”) adopted a new rule severely restricting the use of non-compete agreements in the United States. You also might have heard that a number of organizations, including the U.S. Chamber of Commerce have already challenged this rule in court. Below is a Client Alert written by several of my colleagues (Robert C. Nagle, Brian A. Berkley, or Josephine H. Wenson) respecting the details of the new rule and a recent court challenge.
The TL:DR for the franchise industry is that the FTC carved out non-compete clauses between franchisor ..read more
Fox Rothschild Blog
7M ago
If you attended this year’s IFA Annual Convention in Phoenix, you heard Senator Joe Manchin strongly support and defend the franchise business model in a speech. Late on Wednesday, Senator Manchin used his vote to back up the talk.
Specifically, Senator Manchin was the sole Democrat to cross the aisle and vote for a Congressional Review Act (“CRA”) measure of disapproval of the National Labor Relations Board (“NLRB”) new joint employer rule. As we’ve noted, the new rule could hold franchisors liable for franchisee labor law violations if those franchisors possess or exercise the right or auth ..read more
Fox Rothschild Blog
7M ago
The Securities Division of the Indiana Secretary of State issued a press release this week announcing that it filed an administrative complaint against Florida based Mac and Cheese Franchise Operations LLC and its parent company and owners (“MACFO”), the franchisor of the I Heart Mac & Cheese franchise restaurant concept. According to the complaint, MACFO is accused of pushing an unprofitable business model and misrepresenting to prospective franchises the start-up costs to open a location. None of the three locations in Indiana are still open and operating and the rest ..read more
Fox Rothschild Blog
7M ago
Back in December 2022, we published a blog informing readers that guidance on franchise sales brokers and agents may be on the horizon. The North American Securities Administrators Association’s (“NASAA”) Franchise and Business Opportunities Project Group told us at the 2022 ABA Forum on Franchising Annual Meeting that it was focused on evaluating a model for third party franchise seller registration. At the time we did not have any information beyond the announcement, but it looks like the State of California is paving the way with its new proposed Senate Bill No. 919. &nbs ..read more
Fox Rothschild Blog
7M ago
A district court in Georgia recently granted a Motion for Preliminary Injunction filed by HOA Franchising, LLC’s, the franchisor of the Hooters restaurant chain (“Hooters”), against one of its former restaurant franchisees, MS Foods, LLC (“Franchisee”), but in doing so “blue-penciled” the Hooter’s post-term restrictive covenant to narrow the geographic limitations on the Franchisee.
The Franchisee was terminated by Hooters for repeated defaults, including failing to meet operational standards, failing to pay amounts due to satisfy Franchisee’s indemnification obligations under the fran ..read more
Fox Rothschild Blog
8M ago
A federal district court recently granted the United States’ Motion for Default Judgment against the quick-service burger restaurant franchise concept, Burgerim Group USA, Inc. and its owner (“Burgerim”). The Federal Trade Commission (“FTC”) filed a complaint against the defendants alleging they used misleading sales practices to sell more than 1,500 franchises in violation of the FTC Franchise Rule. The complaint arose after several states, particularly California, Indiana, Maryland and Washington, filed cease and desist orders and barred Burgerim from offering and selling franchisees ..read more
Fox Rothschild Blog
8M ago
In a move welcomed by employers nationwide, a federal court judge in Texas has vacated the National Labor Relations Board’s proposed joint employer rule.
Copyright: mipan / 123RF Stock Photo
The decision, handed down late on March 8, 2024, by Judge J. Campbell Barker of the Eastern District of Texas, means that the more employer-friendly standard the Board implemented in the waning days of the Trump administration, which requires a showing of “immediate and direct control,” will continue to apply for the foreseeable future.
Judge Barker’s decision, which called the proposed joint employer stan ..read more