Franchise & Distribution Law Update, Winter 2010

01/18/2010 / Franchise & Distribution Group Members



Updates for Franchisors:

International Franchising News:

Recently Published Articles:

Featured Franchisor:

About Us:


Franchise Renewal Season is Upon us
For the majority of franchisors, the first quarter of the calendar year is also the first quarter of their fiscal year, and thus the time they focus on updating their franchise disclosure documents.  Unfortunately, a simple review of existing documents will not always identify the issues that have occurred in the past year that require disclosure.  Continue

Recent Decision Prompts Recommended Changes to Franchise Agreements
The recent decision in Burda v. Wendy’s International, Inc. et al., is prompting us to recommend that all franchisors review certain language regarding suppliers in their franchise disclosure documents and franchise agreements.  Continue

FTC Delays Enforcement of Red Flags Rules Again
The Federal Trade Commission has once again announced that it will delay enforcement of the Red Flags Rules until June 1, 2010, as applicable to financial institutions and creditors.  The Red Flags Rules deal with identity theft prevention, and the FTC has previously announced the potential application of this law to certain franchisors.  Continue 


Australia to Further Amend Franchise Law
The Australian Government recently announced that it will make further amendments to the Australian Franchising Code of Conduct based on a report by the Joint Committee on Corporations and Financial Services and the Senate Standing Committee on Economics.  Continue

Franchising in the Middle East Live Teleconference
The ABA Forum on Franchising and the ABA Center for Legal Education is hosting a 90 minute teleconference and live audio webcast entitled, “Franchising in the Middle East: Navigating the Risks and Rewards of the World’s Most Interested Market.”  The teleconference and webcast will take place on January 27, 2010 at 1 p.m. (EST). 


“Personal Liability of Franchisor Executives and Employees Under State Federal Laws,” by Cyndi Klaus, published in Franchise Law Journal, Volume 29, Number 2, Fall 2009
This article discusses the potential for executives and employees to be held personally liable to franchisees for their actions, including the statutory provisions regarding personal liability of franchisor executives, differences in how the provisions have been interpreted, and the lack of litigation under such laws. 

“Court Watch” by Cyndi Klaus and Meredith Bauer, published in Law Journal Newsletter – Franchising Business & Law Alert, December 2009
This article discuss two recent cases in franchising.  The first case demonstrates that franchisors should proceed with caution when taking over a franchised location abandoned by the former franchisee.  The second case discusses a factual circumstance in which treble damages were awarded to a franchisor for the franchisee’s trademark violations.  


abc Seamless® - A leader in onsite manufacturing
The abc Seamless® business, one of America’s largest home improvement franchise businesses, was founded by Jerry Beyers of Fargo, North Dakota, who introduced the Midwest to the first seamless gutter machine in 1973.  Continue


Recent Success: Larkin Hoffman Stops Former Franchisee From Competing Against the Franchise System
A franchisor client discovered that a multiple-unit franchisee in Las Vegas, Nevada had converted one of its locations to a competing business, and was in the process of converting its other locations as well.  Larkin Hoffman attorneys Chuck Modell, Jim Susag and Cyndi Klaus developed a strategy for responding to this situation, whereby an investigation was immediately commenced, including surveillance of all of the locations, as well as preparation of a lawsuit and request for a preliminary injunction in Minnesota Federal Court.  Armed with information concerning the competing locations, Larkin Hoffman obtained immediate relief from the Federal District Court in Minnesota, which it then used as a means to resolve the entire dispute, including entering into a consent injunction with the franchisee and repayment of its attorneys fees.

 Modell and Bauer to Facilitate Roundtable Discussions on working with financially distressed franchisees and social networking in franchise systems at IFA Annual Convention
Chuck Modell and Meredith Bauer will be featured as facilitators for the Business Solution Roundtables session at the upcoming IFA Convention in San Antonio, Texas, February 5-8, 2010.  The roundtable sessions are designed to facilitate discussion on cutting-edge topics in the franchising industry, and provide practical solutions to staying competitive in today’s marketplace.  

 Perrin to Lead Supplier Orientation Program at the IFA Annual Meeting
Andrew Perrin will be leading an orientation program at the IFA Annual Meeting in San Antonio, Texas on how to maximize your involvement in the International Franchise Association.  The program will be on Friday, February 5, 2010, from 3:00 to 4:00 pm.

Fittante Elected to Second Term of the ABA Forum on Franchising Governing Committee
Joe Fittante was recently elected to serve a second term on the Governing Committee of the ABA Forum on Franchising, and he was appointed as the program officer for all programming of the Forum on Franchising.  The ABA Forum on Franchising is the premier organization in the United States for the study and discussion of the legal aspects and concepts of franchising.  The Governing Committee makes up the nation’s leaders of this organization.

Perrin is Immediate Past Chair of the IFA’s Supplier Forum
Andrew Perrin is currently serving as the Immediate Past Chair of the International Franchise Association’s Supplier Board, having previously served as its Chair and as member of the International Franchise Association’s Board of Directors.  In the summer of 2009, Andrew was selected by the IFA as a member of the IFA’s Franchise Congress, representing the 3rd Congressional District of Minnesota. 



For more information about Larkin Hoffman's Franchise & Distribution practice group, visit our homepage.




Contact our Larkin Hoffman Franchise and Distribution group members:

Charles S. Modell
Email 952-896-3341

Joseph J. Fittante, Jr.
Email 952-896-3256

William G. Thornton
Email 952-896-1578

Cynthia M. Klaus
Email 952-896-3392

James M. Susag
Email 952-896-1572

Pamela N. Merkle
Email 952-896-3337

Meredith A. Bauer
Email 952-896-3263

Jon S. Swierzewski
Email 952-896-3280

Andrew F. Perrin
Email 952-896-3394

Edward J. Driscoll
Email 952-896-3235

This alert is provided as a service to our clients and firm associates. While the information provided in this publication is believed to be accurate, it is general in nature and should not be construed as legal advice.