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FAST Act Shrapnel: AB 1228 redefines the franchise relationship

The FAST Act is in limbo pending the outcome of a California ballot repeal initiative. Undaunted, the Legislature has excised key provisions of that Act and positioned them for separate enactment as AB 1228, introduced by...more

This New Year’s Eve say Auld Lang Syne to Old Franchise Questionnaires and Acknowledgements

This fall we posted about the North American Securities Administrators’ (NASAA) adoption of a Statement of Policy Regarding the Use of Franchise Questionnaires and Acknowledgments (the “SOP”). Technically, NASAA’s SOP...more

California’s Tectonic Plates Shift — Part III

And so we come to the ultimate affront to franchising. Responding to strong lobbying efforts by the Service Employees International Union (SIEU), the California legislature passed the Fast Food Accountability and Standards...more

California’s Tectonic Plates Shift — Part II

Signed into law on September 18, 2019 by Governor Gavin Newsom, Assembly Bill 5 (commonly known as AB-5), took effect on January 1, 2020. AB-5 codified the California Supreme Court’s June 2018 decision in Dynamex Operations...more

California’s Tectonic Plates Shift — Part I

“California’s falling into the ocean!” Growing up in Southern California I heard that every time we had an earthquake. Usually, though, all I had to do was stand in a door jamb and wait until the shaking stopped (now not the...more

Want Some Antitrust with your Burger?

Eleventh Circuit’s Burger King opinion raises antitrust risks in franchising- Sherman Act challenges to “no-poach” clauses in franchise agreements have been languishing in federal courts for a few years now, but with...more

Franchisors: We Offer The Following Prescription for Your Consideration

Recently we discussed the headwinds that remain for the franchise community as a result of policy changes coming from Washington and the various state capitols. What should franchisors consider as they swim in this sea of...more

Franchise Industry Calamity Averted, For Now

In recent blogs, we identified serious threats to the franchise industry – the Protect the Right to Organize (“PRO”) Act, joint employer standards, state ABC laws, and the new Biden Administration guard at the Department of...more

Franchising Threat No. 4: The Deus Ex Machina (A Biden Executive Order)

While the Protect the Right to Organize (PRO) Act was passed by the House of Representatives, it has not been made part of the Biden administration’s infrastructure efforts thus far and does not appear have sufficient support...more

Franchising Threat No. 3: Other State Legislation And Policies

The California version of the ABC test is arguably the most hostile to franchising. Nonetheless, the risk is not confined to California. This is because the ABC employee classification test, with variations, has been...more

Franchising Threat No. 2: Joint Employment Is BACK!

The second troublesome threat is the joint employment standard. The Obama Adminstration DOL caused angst in the franchise industry in January 2016, when it adopted a joint employment standard that focused on “whether the...more

Legal Threats To The Franchise Industry: Is This The Apocalypse? (Part 1)

Omens of the Apocalypse for the franchise industry are everywhere: •The pending Protect the Right to Organize (PRO) Act; •The return of David Weill, author of Fissured Employment and chief architect of the Obama era...more

WHIPLASH! A Stunningly Fast Reversal Of Labor Policies

It was predictable – even inevitable – that the Biden administration would reverse much of Trump’s labor oeuvre. But no one could have predicted how quickly! In a little more than a month, the administration has:...more

Unintended Consequences? The Employment Battle Threatens Franchising

The one-two punch of state and federal employment standards activity poses an existential threat to franchising; many commentators, including this one, have acknowledged that fact. But why? Did the California legislature or...more

Franchising On The Precipice: Unknowns In Transition

Change is coming, but will it be a welcome change or a harbinger of woe? Over the last 8 years or so, the ever-changing landscape of employment laws has arguably posed an existential threat to franchising. The franchise...more

No Joy For Franchising in CA: AB-5 Exemption Rejected

As if COVID, wildfires, and heat weren’t enough, California franchisors and franchisees suffered another gut punch when the legislature rejected a proposed franchise exemption to AB-5. When AB-5 was enacted in 2019, to the...more

Are COVID Immunity Laws Good For Franchising? (Part 2: The Counterpoint)

My vote is YES! In fact, I think they are essential! I thus respectfully disagree with my partner and colleague John Gotaskie. John appropriately focuses on three stakeholders in discussing immunity legislation: business...more

The Ballad Of The Hare And The Tortoise: FASB Delays ASC 606

Surprise! On April 8th, FASB delayed for one year the implementation of the new ASC 606 revenue recognition standards for private companies, citing the coronavirus pandemic. In addition to delaying implementation, FASB...more

CARES ACT – A LIQUIDITY LIFELINE (With Tough Choices For Franchising)

Let’s face it—COVID-19 has decimated the franchise industry, along with the rest of the economy. The food service, hospitality, travel and the service sectors had very tough decisions to make almost instantly, with very...more

Franchising: Batting A Thousand In Spring Training!

In my recent post commenting on the Department of Labor’s joint employer rule, I wondered whether the NLRB would follow suit. Now we know, and the answer’s positive. It’s very good news for franchising! As we noted in a...more

Positive News On The Joint Employer Front!

In 2014, David Weil assumed the reins at the Department of Labor’s Wage and Hour division. Dr. Weil, an economic scholar, set his sights on the concept of joint employment. In academia, his work focused on what he termed a...more

Happy Holidays? More Challenges In Franchising

It’s the holiday season, but franchise lawyers may find little in recent events to celebrate. The challenges just keep on coming! Most recently, we’ve been challenged by California’s AB5 legislation and Dynamex decision,...more

Time To Exhale . . . CAUTIOUSLY: Ninth Circuit Has Good News For Franchisors

I admit I was among the scores of franchise lawyers whose blood pressure skyrocketed with passage of California’s AB 5. If a Franchise Agreement establishes an independent contractor relationship between franchisor and...more

California’s AB-5 Implications (Part 2)

As noted in our first post on this topic, California’s AB-5 codified the employment test set forth in Dynamex Operations West v. Superior Court of Los Angeles, 4 Cal. 5th 903 (2018). Although the full implications of this new...more

California’s AB-5 Implications (Part 1)

“Some day, California’s going to fall into the ocean” usually refers to the San Andreas fault. Now it may refer to AB-5, and the future of the franchise industry in California. The California legislature has now passed...more

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