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|You're Gonna Have to Do More Than That: Passive Investment in California Limited Liability Company Insufficient to Meet Statutory Nexus Threshold|
Timothy A. Gustafson, Evan Hamme; Sutherland Asbill & Brennan LLP;
December 12, 2014, previously published on November 26, 2014A California Superior Court held that passive membership in a limited liability company (LLC) is insufficient to meet California’s statutory “doing business” standard. In Swart Enterprises, Inc. v. California Franchise Tax Board, an Iowa corporation with no business activities or...
|Get ready, Vietnam’s Restaurants Open To 100% Foreign Ownership!|
Manfred Otto; Duane Morris Vietnam LLC;
November 17, 2014, previously published on October 24, 2014Now is the time for international chains to position themselves. Beginning in January 2015, Vietnam’s restaurant business is open to 100 percent foreign ownership. Foreign-invested enterprises (“FIE”) may run their own production and internal logistics network free from...
|Hidden Trap in Confidentiality Provisions in Settlement Agreements Entered into by Franchisors|
Nicole J. Harrell, Stephen E. Story; Kaufman & Canoles A Professional Corporation;
November 13, 2014, previously published on January 2, 2014Franchisors entering into settlement agreements must be certain that the settlement agreements give the franchisor the right to make any disclosures required by the Franchise Disclosure Document (“FDD”), without breaching any confidentiality provisions in the settlement agreement.
|Governor Vetoes Proposed Changes to California Franchise Law|
Michael A. Bowen, Roberta F. Howell; Foley & Lardner LLP;
October 28, 2014, previously published on October 3, 2014To the surprise of many, California Governor Jerry Brown has vetoed the proposed changes to California’s franchise laws that were discussed in our Client Alert on August 28, 2014. In his veto message, Governor Brown criticized the bill’s substitution of “substantial and material...
|“Frustrating” Decision Highlights Alternate Approach to Rescission Claims|
Carly Cohen; Cassels Brock & Blackwell LLP;
October 14, 2014, previously published on October 8, 2014In the recent appeal of Dhillon v PM Management Systems Inc., an Ontario Superior Court judge upheld the decision of a Deputy Judge of the Small Claims Court, granting a franchisee’s claim for the return of an initial, non-refundable franchise fee.
|Deli Franchisor’s Disclosure Misses the Mark: Lessons From DeliMark Café|
Christopher Horkins; Cassels Brock & Blackwell LLP;
October 14, 2014, previously published on October 8, 2014In the recent case of 2237310 Ontario Inc. v. 2264145 Ontario Inc. the Ontario Superior Court of Justice granted a declaration of rescission on summary judgment to a franchisee as a result of numerous disclosure failures. The case provides a helpful reminder of the need to ensure compliance with...
|Surprise! You Might be an Employer of Your Franchisee’s Employees|
Anne-Marie Naccarato; Cassels Brock & Blackwell LLP;
October 14, 2014, previously published on October 8, 2014On July 29, 2014, the National Labor Relations Board in the United States authorized 43 complaints of alleged violations of the National Labor Relations Act to proceed against McDonalds, USA, LLC (“McDonald’s”). The alleged violations occurred at McDonald’s franchised...
|Ontario’s Franchise Legislation Declared Inapplicable to a Single Trademark License|
Stefanie Holland; Cassels Brock & Blackwell LLP;
October 14, 2014, previously published on October 8, 2014The Superior Court of Justice has recently become the first court in Ontario to address the question of whether the Arthur Wishart Act (Franchise Disclosure) (the “Wishart Act”) applies to the license of a single trademark.
|Brand Protection: The Case for Franchisor Auditing and Enforcement of Franchise Agreement Compliance Clauses|
Mary E. Pivec; Ford & Harrison LLP;
October 7, 2014, previously published on October 3, 2014Executive Summary: The recent criminal prosecution of several 7-Eleven franchisees, which arose out of a criminal alien employment investigation, as well as efforts by government agencies to treat franchisors and franchisees as joint employers for the purposes of liability under federal labor and...
|Developmental Costs: Texas Comptroller Rules Essential Preparatory Costs Cannot Be Accounted for in Apportionment Factor|
Ted W. Friedman, Prentiss Willson; Sutherland Asbill & Brennan LLP;
October 3, 2014, previously published on September 29, 2014The Texas Comptroller determined that for Texas franchise tax purposes the apportionment factor of an out-of-state taxpayer engaged in the provision of technical training could not be adjusted to account for certain costs incurred in preparing and marketing the training sessions. The training...