Maine Franchise Bill Protects Franchisees Author: Don Sniegowski
A new bill introduced in Maine could mean added protections for franchisees from predatory franchise practices as well as more freedom of operation, but the International Franchise Association (IFA) is aiming to kill the legislation. The new law would allow franchisees to set their own prices, have more freedom over business hours and provide for fee-free licensing renewal among other benefits. Franchisee organizations and small-business owners support the legislation, but IFA officials argue its government overreach at its worst. Even so, the bill has received strong support and its passage into law is likely. For more on this continue reading the following article from Blue MauMau.
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Franchisees Don’t Own Franchises Author: Robert Purvin
Despite signing the lease for the business property, hiring the employees and managing the enterprise, experts warn prospective franchisees that they don’t own the business. This argument is justified by noting that the franchisee is beholden to franchisor processes and does not hold any equity in the overall brand. Franchisees are also strictly limited in their ability to sell or transfer rights in the business. Even further, franchisors often retain rights to pull funds from a franchisee’s account and demand a non-compete agreement to limit a franchisee’s future operation or employment opportunity. For more on this continue reading the following article from Blue MauMau.
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Franchise Agreements: Understanding the Franchisor’s Bargaining Position Author: Michael E. Sheehan, Esq.
Recently, a franchisor’s legal representative told me that she was legally prohibited from changing her system’s franchise agreement. As stated, this is an unabashed – or maybe uninformed – deceit, not at all uncommon among new or unsophisticated franchisors, according to some state franchise authorities.
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California Mulls New Franchise Bill Author: Don Sniegowski
Proponents of California Senate Bill 610 say that it’s a necessary step to protect the precepts of good faith and fair dealing between franchisors and franchisees, while opponents at the International Franchise Association argue it will give franchisee attorneys more latitude to enter into frivolous and costly lawsuits against franchisors. Prior to considering the bill, lawmakers heard from several franchise owners who told tales of woe about franchisors that change the rules on the fly to maximize profits and marginalize liability. For more on this continue reading the following article from Blue MauMau.
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Marijuana Reshapes Franchise Contracts Author: W. Michael Garner
Franchise opportunities in the budding marijuana industry are growing and many are wondering how compliances clauses will work in the context of businesses that are in perpetual violation of federal law. Fortunately, this problem does not extend to franchise opportunities involving clinics wherein doctors recommend the use of marijuana, because the right to make that recommendation is protected by the First Amendment. If the typical compliance and termination clause were applied to a dispensary, however, it may be invalidated the illegal activity involved. For more on this continue reading the following article from Blue MauMau.
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Small Businesses Hang Tough Author: Blue MauMau
The Small Business Association reports that more small businesses are generating income and less are going bankrupt, which the organization is taking as a small sign of recovery. Additionally, the National Federation of Independent Businesses reports that confidence among small business owners is on the rise. Even so, statistics show that large businesses are still taking the lion’s share of the recovery profits while small businesses continue to struggle on the whole. Although more small businesses are reporting plans for increased inventory and capital acquisition, the sector still has a long way to go before it’s out of the woods. For more on this continue reading the following article from Blue MauMau.
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Franchise Disclosure Document Updates Author: Mike Sheehan
The franchise disclosure document (FDD) annual update season will conclude at the end of this month for many franchisors. For those franchisors whose fiscal years do not coincide with the calendar year, the updating process may be on-going after May 1, 2013 or may not even start until later in the year.
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The Skinny on Financial Statement Disclosures in FDDs Author: Mike Sheehan
It’s pretty easy to understate the importance of the financial statements required to be included in a franchise disclosure document (FDD). It’s also fairly simple to overstate their worth.
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New Ohio Law Empowers Franchisees Author: Don Sniegowski
Ohio has passed a new law that sets it apart from other states in how much power it gives franchisees to litigate against franchisors. The Ohio Business Opportunity Law was revised to ensure that franchisees could bring suit against franchisors for false claims and fraud stemming from disclosure documents, which is helpful in a state that doesn’t require registration of those documents by franchisors. The new law also makes it tougher for litigants to move the case outside of Ohio, which means Ohio law will rule in more disputes. For more on this continue reading the following article from Blue MauMau.
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Minimum Wage and Small Business Author: Laurie Kulikowski
President Barack Obama offered many solutions for the struggling middle class in his most recent State of the Union address, one of which was raising the country’s minimum wage from $7.25 to $9 an hour. Small-business owners are divided on the issue, and many experts believe the move could hurt the economy rather than help it. While some business owners say $9 an hour is still too little, experts cite the “law of demand” and argue that the more something costs the less of it will be consumed, in this case referring to employees. For more on this continue reading the following article from TheStreet.
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