Adam J. Siegelheim

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In addition to unveiling the new iPhone and Apple Watch, Apple’s CEO, Tim Cook, also recently announced that the approximate 500 million iTunes users would also be receiving a free digital copy of U2’s latest album, Songs of Innocence. The album would be automatically downloaded and appear in each user’s iTunes library without the person having to do anything. Analysts are estimating that this deal with U2 cost Apple approximately $100 million dollars. Apple likely…
In Naik v. 7-Eleven, Inc., (U.S. District Court. D.N.J., Civil No. 13-4578), certain 7-Eleven franchisees in New Jersey alleged that they are employees, not independent contractors, of the franchisor, and that the franchisor violated the federal Fair Labor Standards Act (FLSA) and other New Jersey statutes.  7-Eleven made a motion to dismiss, which was denied by the court. Each plaintiff entered into a franchise agreement with 7-Eleven.  Despite clear language in the franchise agreement indicating…
The recent decision of Yogo Factory Franchising, Inc. v. Edmond Ying, et al., (US District Court D. New Jersey 2014), has been the subject of prior blog postings. We have discussed the court’s enforcement of the arbitration provision contained in the franchise agreement and the court’s re-affirmation that the New Jersey Consumer Fraud Act does not apply to the sale of franchises. Another noteworthy aspect of the court’s decision is the discussion of the…
A common question that we receive from our franchisor clients is, “Can we update our FDD and franchise agreement permitting the franchisor to impose fines on franchisees for non-compliance?” The simple answer is that while you can update your documents to permit the imposition of fines, the real question franchisors should be asking is, “Are fines an effective tool to minimize instances of non-compliance with System standards?” Recently, a hotel received unwanted attention for its
The National Labor Relations Board Office of the General Counsel has created a firestorm in the franchise community with its recent decision that McDonald’s and its franchisees will be treated as joint employers with respect to allegations that they violated the rights of employees. The NLRB’s decision strikes at the heart of the franchising business model, which is based on franchises being independently owned and operated businesses. If upheld, the NLRB’s decision could have a…
In last week’s blog posting we discussed the recent decision of Yogo Factory Franchising, Inc. v. Edmond Ying, et al., US District Court D. New Jersey 2014), in which the court enforced the arbitration clause contained in the franchise agreement. Also notable in this case was the court’s decision reaffirming that the New Jersey Consumer Fraud Act did not apply to the sale of franchises. In this case, the franchisee alleged that the franchisor committed…
In Yogo Factory Franchising, Inc. v. Edmond Ying, et al., US District Court D. New Jersey 2014), the court enforced the arbitration clause and held that the arbitration clause should be applied to all the franchisee’s claims arising from the franchise agreement.  In this case, the franchisee alleged breach of contract, tort and statutory claims against the franchisor. In addition to contending that the franchisor breached the terms of the franchise agreement, the franchisee also…
The New Jersey Appellate Division recently held that insurance agents were not considered “franchises” under the New Jersey Franchise Practices Act (Mario DeLuca v. Allstate New Jersey Insurance Company (Superior Court of New Jersey, Appellate Division No. A-2724-11T4 (2014)).    The Plaintiff insurance agents were independent insurance agents for Allstate. The court noted that “relationship between Allstate and plaintiffs did not constitute a franchise under the Act because there was no “community of interest” and…