(914) 265-4100. jl@lusthauslawpc.com

Franchise Matters

What do franchisees need to know about real estate? What do franchisees need to know about leases? Plenty.

Thinking about expanding through franchising? Then, one of the first things you will need to do is have a franchise disclosure document (FDD) prepared. Second, you will have to register that FDD in the states that require registration, and then, as a franchisor, you will issue that FDD to prospective franchisees.

New York Times Reporter Rachel Adams recently wrote about a group of states attorneys general investigating whether some fast food franchisors were forbidding franchisees from hiring the employees of others in the same system.

Franchisors are likely giving a standing ovation to a recent court ruling in support of their contention that they are not joint employers with their franchisees. A federal district court for the Northern District of Illinois, Eastern Division, has dismissed claims against franchisor Jimmy John’s, finding instead that the defendants, employees of Jimmy John’s franchisees, were not also employees of the franchisor.

In our previous blog, we discussed disclosure laws. Today, let’s take a closer look at “franchise relationship laws.” Picking up from Blog Part One, it must be understood that franchise laws and regulations were enacted to address abuses occurring in the franchise industry.

Selling a franchise? Be prepared because when it comes to selling a franchise, there are many laws regulating every sale. First to consider are the disclosure laws.

Are the employees of your franchisee your employees too? That’s the question National Labor Relations Board General (NLRB) Counsel Peter Robb sought to avoid when he proposed the March 19, 2018 settlement agreed to by McDonald’s.

That depends! If you are considering entrepreneurship, one of the first questions that you will have to ask yourself is whether you want to start a new business or buy one that is already operating.

Pretty darn strong! According to the 2018 Franchise Business Outlook Report issued by the International Franchise Association (IFA), the franchise sector is expected to grow faster than the rest of the U.S. economy.  In 2018, franchise establishments are expected to grow an additional 1.9 percent to reach 759,000 strong.

Whether you are a single store or multi-location franchise restaurant operation, food waste is costing you money. Lots of money.


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