ZorBlog

A Legal Blog for Franchisors

As my partner, Kathleen Petrich, mentioned in her recent post, Subway took quick action to distance itself from Jared Fogle upon learning of the investigation into his alleged involvement with child pornography. Subway’s actions included removing reference of Jared from its website and from the thousands of Subway restaurants. But how can Subway do that when it does not actually own thousands of those Subway locations?Subway is a franchise system. The majority of…
The National Labor Relations Board (NLRB or Board) has just announced its long‑anticipated decision in Browning-Ferris Industries of California, Inc. That case had been pending before the Board since April 2014, when the Board announced that it would reconsider the standards for determining joint‑employer status under the National Labor Relations Act. The Board invited briefs on the issue from the business community, unions, and government agencies. Most observers expected that the decision would favor expansion of…
By now you have likely read that the U.S. District Court for the Western District of Washington denied the International Franchise Association and five franchisees’ motion for a preliminary injunction. The plaintiffs sought the Court’s relief to enjoin the April 1st implementation of the City of Seattle’s minimum wage ordinance. The IFA announced on Friday that the plaintiffs plan to appeal the court’s decision to the 9th Circuit. The minimum wage ordinance created a $15…
As expected, the United States District Court for the Western District of Washington that heard oral argument last week on the International Franchise Association’s motion for a preliminary injunction against the City of Seattle denied the IFA’s motion and refused to enjoin implementation of the City’s $15 per hour minimum wage ordinance against franchisees. The Court’s Order dismisses as insufficient the IFA’s evidence of statements by three lawmakers and a member of the Mayor’s advisory…
The U.S. District Court for the Western District of Washington heard oral argument today on the International Franchise Association‘s motion for a preliminary injunction against the City of Seattle. The IFA is seeking to enjoin implementation of the City’s $15 per hour minimum wage ordinance against small franchisees. The ordinance, adopted in 2014, requires large employers (defined as those with more than 500 employees) to raise wages at a faster pace than small businesses.…
South Korea Will Woods of Baker & McKenzie gave an update on the 14 February 2014 amendments to the Korean Fair Franchise Transactions Act. A few of the changes that took effect in February are retroactive and will apply to contracts already in place at the time of the amendments. Retroactive amendments include: • franchisors must have ‘just cause’ to require upgrades or improvements to franchised locations; • franchisors are required to share the cost…
Editor’s Note: This series of posts we’re calling “Around the World” come from a larger piece written by Shannon McCarthy and published in the October 2014 edition of the International Bar Association’s International Franchising Newsletter. Updates were provided by speakers at the Annual IBA/IFA Joint Conference that took place in Chicago in May 2014. Dr. Dagmar Waldzus of Buse Heberer Fromm gave us an update on a couple of recently-decided cases, but first provided a framework…
The Washington State Department of Financial Institutions recently published proposed changes to the agency regulations governing delivery of an FDD subject to Washington’s Franchise Investment Protection Act. The new provision would expressly permit franchisors to deliver an FDD over the internet or by other electronic means. The current rule is silent as to the method of delivery of an FDD. The rules would require a franchisor to deliver the FDD as a single document that…
On July 29, the NLRB’s General Counsel Richard Griffin announced that he would allow administrative actions to proceed against McDonald’s as a “joint employer” of a franchisee’s employees. Since then, the NLRB has been asked to explain the rationale for that decision. While no formal explanation has been provided, POLITICO’s Brian Mahoney recently reported that Griffin informally discussed his views in a talk at the University of West Virginia law school. Griffin’s comments are revealing,…
Editor’s Note: This series of posts we’re calling “Around the World” come from a larger piece written by Shannon and published in the October 2014 edition of the International Bar Association’s International Franchising Newsletter. Updates were provided by speakers at the Annual IBA/IFA Joint Conference that took place in Chicago in May 2014. Luciana Bassani of Dannemann Siemsen gave an update on Brazil’s new Anti-Corruption Act and its impact on franchising. The Act became effective on 28…