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|Sioux City Looks to Settle Excessive Fee Claims|
Sutherland Asbill Brennan LLP;
March 4, 2014, previously published on February 3, 2014Residents in multiple Iowa cities have filed lawsuits claiming that franchise fees added to customers’ utility bills by those cities were excessive and amounted to an illegal tax. Despite the Iowa legislature’s subsequent passing of a law legalizing franchise taxes of up to 5 percent,...
|Iowa Companies Sue City Over Franchise Fees|
Sutherland Asbill Brennan LLP;
March 4, 2014, previously published on February 4, 2014Eighteen companies in Dubuque, Iowa, have filed suit against the city over its refusal to reimburse franchise fees. The plaintiffs claim that they have paid franchise fees on gas and electric utility bills imposed by utilities, including Maquoketa Valley Electric Cooperative.
|Commercial Cleaning Franchisor Sweeps Up RICO Claims — Arbitration Provision and Class-Action Waiver Clause Valid and Enforceable By Nonsignatories|
February 19, 2014, previously published on February 4, 2014Stratus Building Solutions faced a business challenge on a bet the company scale. Despite winning many franchise awards, five franchisees charged that its entire system imposed a fraud on franchisees. The plaintiffs sued 179 defendants, including the system franchisor, master (regional)...
|Thanks for Being a Delaware Corporation: Here Is Your $180,000 Franchise Tax Bill|
Richard C. Segal; Foley & Lardner LLP;
February 19, 2014, previously published on February 18, 2014Delaware is the state of incorporation for a majority of venture-backed and publicly-traded corporations. The Delaware courts have developed considerable expertise in dealing with corporate issues and there is a substantial body of case law construing Delaware law. As a result, investors are...
|Ten Contract Provisions That a Prospective Franchisee Should Consider Before Signing a Franchise Agreement|
Ted P. Pearce; Nexsen Pruet, LLC;
February 18, 2014, previously published on February 10, 2014The saying that “love is blind” is as true in picking a franchise as in finding a soul-mate. Most prospective franchisees tend to shop franchise concepts instead of franchise agreements. They focus their search on hot concepts, franchise systems that have a good track record, and...
|Financial Performance Representations|
Nexsen Pruet LLC;
February 18, 2014, previously published on February 11, 2014On Tuesday February 11th, the Charlotte Business Franchise Network met on the 15th floor conference room at Nexsen Pruet. The attendees, representing a broad cross section of franchisors, master franchisees, and franchise suppliers, were undaunted by the weather, and gathered to talk about...
|Franchisors Must Repurchase Damaged Equipment From Franchisees Upon Rescission|
Brooke MacKenzie, Adam Ship; McCarthy Tétrault LLP;
February 17, 2014, previously published on February 4, 2014In the latest installment of the Springdale Pizza Depot franchise dispute, the Ontario Superior Court of Justice clarified that, upon rescission, franchisors must buy back supplies and equipment purchased by the franchisee pursuant to the franchise agreement - even if the equipment is in very poor...
|Individual Guarantors in Alberta: Trap for the Unwary and Extra Cost|
Jonathan Fleisher, Monique Sassi; Cassels Brock & Blackwell LLP;
February 14, 2014, previously published on February 12, 2014On December 11, 2013, Alberta Bill 44: Notaries and Commissioners Act, received royal assent. The Bill which will come into force upon proclamation, amends the Alberta Guarantees Acknowledgment Act and in turn, changes Alberta law as it applies to any guarantee with an individual guarantor.
|Court Authorizes City Subsidy to Car Dealer Two Years After Dealer Relocates to City|
Kronick Moskovitz Tiedemann Girard A Law Corporation;
February 12, 2014, previously published on February 10, 2014Juan Lou Gonzales ("Gonzales") owned a Saturn dealership in Palmdale. During the recent recession, General Motors ("GM") stopped making Saturn cars. As a result, Gonzales sought and was conditionally awarded a Chevrolet franchise from GM. GM’s conditions required that...
|Drafting General Release Clauses in Franchise Agreements: A Cautionary Tale from the Ontario Superior Court of Justice|
Brooke MacKenzie, Tyler McAuley, Adam Ship, Thomas N.T. Sutton; McCarthy Tétrault LLP;
February 12, 2014, previously published on February 10, 2014The Ontario Superior Court of Justice recently struck down a general release clause in a franchise agreement, even though the franchisor only sought a release with respect to non-statutory claims. The case provides important guidance regarding how to draft a release that will withstand scrutiny...