The decision of the National Labor Relations Board (“NLRB”) in July 2014 to authorize the filing of administrative complaints against McDonald’s USA, LLC (“McDonald’s”), the largest franchisor of restaurants in the United States, and recent court decisions, highlight one of the hottest issues in franchise law. Are your franchisees and their employees actually your employees?… Continue Reading
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… Continue Reading
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… Continue Reading
In this podcast, Adam Siegelheim, Shareholder in Stark & Stark’s Franchise Group, is joined by Richard Coyne of WithumSmith+Brown to discuss the recent merger between Burger King and Tim Hortons. Adam and Rick discuss the tax implications of the merge as well as tax inversion deals.
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 heightened standard under New Jersey law to successfully assert a fraud claim.
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?”
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.
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 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.
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)).