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|Will Petition Flow Through, Too? Texas Comptroller Seeks Review on Subcontractor Payments for Franchise Tax Purposes|
Stephanie T. Do, Timothy A. Gustafson; Sutherland Asbill & Brennan LLP;
September 4, 2014, previously published on August 28, 2014 The Texas Comptroller has filed a reply supporting its petition for review to the Texas Supreme Court in Titan Transp., LP v. Combs, 433 S.W.3d 625 (Tex. App. 3rd 2014). The taxpayer in Titan was in the business of hauling, delivering and depositing aggregate at construction sites, providing its...
|California About to Make Franchise Terminations Harder|
Michael A. Bowen, Roberta F. Howell; Foley & Lardner LLP;
September 1, 2014, previously published on August 28, 2014A bill on the verge of becoming law in California will sharply narrow the grounds for termination of franchises in that state, and may require re-examination of the terms of franchise agreements. Existing California law bars termination of franchises prior to expiration of their terms “except...
|Ontario Court Declares That Bare Trademark License Agreement Is Not Subject to Franchise Disclosure Legislation|
Helen Fotinos, Brooke MacKenzie, Catherine M. Samuel, Adam Ship; McCarthy Tétrault LLP;
August 25, 2014, previously published on August 19, 2014A recent decision of the Ontario Superior Court of Justice found that a bare trademark license agreement was not subject to Ontario’s franchise legislation. The decision provides guidance to companies that wish to avoid the application of Ontario’s Arthur Wishart Act (Franchise...
|California's "Doing Business" Standard Requires Neither Any "Doing" Nor Any "Business" in California|
Stephen A. Burroughs, Pilar Mata; Sutherland Asbill & Brennan LLP;
August 19, 2014, previously published on August 13, 2014 The California Franchise Tax Board (FTB) issued a legal ruling determining that it will attribute the business activities of a multiple-member limited liability company classified as a partnership for tax purposes (LLC) to its members when determining whether such members are “doing...
|Actions May Speak Louder than Words: Can Franchise Agreements Protect Franchisors from Liability as Joint Employers?|
David Dubberly, Ted P. Pearce; Nexsen Pruet, LLC;
August 14, 2014, previously published on August 5, 2014The National Labor Relations Board (NLRB) has created a buzz within the franchise community by announcing that McDonald's may be responsible as a "joint employer" for alleged unfair labor practices of some of its franchisees. Employees of franchisees have filed more than 180 unfair labor...
|Appeals Court Upholds "Silent Fraud" Jury Verdict under Franchise Investment Law|
David L. Cahn; Whiteford, Taylor & Preston L.L.P.;
August 12, 2014, previously published on August 6, 2014Take-away: If your franchise offering document is silent on key issues, you can be liable if your people “oversell” to a potential franchisee. Better to deal with the issue in carefully vetted writing than to be surprised by something your people say off the cuff.
|Enforcing Quality Standards in Hotel Franchise Agreements|
David L. Cahn; Whiteford, Taylor & Preston L.L.P.;
August 12, 2014, previously published on August 6, 2014Take-away. A franchisor’s diligence in conducting and documenting quality assurance inspections is as important as ever, particularly if the franchisor seeks to exercise its ultimate weapon - termination of the franchise agreement. Prudent inspection and documentation practices are...
|Food, Folks, and Franchise-Wide Liability: NLRB Signals Intent to Pound Square Joint Employer Peg Into Round Franchise Hole|
Christopher G. Ward; Foley & Lardner LLP;
August 12, 2014, previously published on August 11, 2014A big part of what makes the franchise model of business attractive to small business owners is the opportunity to own and operate their own business, but with their entrepreneurial risk backstopped by a known regional or national brand. In turn, the franchisor facilitates the success of its...
|NLRB Franchisor-Liability Decision Could Reach Professional Services Firms|
Dana S. Douglas, Stanley J. Parzen; Mayer Brown LLP;
August 7, 2014, previously published on August 5, 2014A recent decision from the US National Labor Relations Board (NLRB) could open the door to new sources of liability for some professional services firms. The decision allows franchisors to be treated as “joint employers” along with their franchisees in labor complaints. In considering...
|NLRB Moves Toward New Standard to Hold Franchisors Are Joint Employers of Their Franchisees' Employees|
Frederick L. Warren; Ford & Harrison LLP;
August 4, 2014, previously published on August 1, 2014Executive Summary: Over the last two years fast-food workers have engaged in walkouts and other activities protesting their wages and seeking an increase to $15/hr. Numerous unfair labor practice charges have been filed with the National Labor Relations Board (NLRB) against restaurant franchisors...