If you are considering the purchase of a franchise, what is the value in hiring a franchise attorney? Purchasing a franchise is an extensive, and sometimes overwhelming, process that covers business, financial and legal issues. Since a franchise is typically a significant investment and long-term commitment, you are well advised to work with professional advisors along the way. So why should you hire a franchise attorney?
Looking to Buy a Franchise? Your Due Diligence in Conjunction with Our Legal Review
When we assist prospective franchisees considering the purchase of a franchise, we review the Franchise Disclosure Document and Franchise Agreement. We want you to understand your legal obligations under the Franchise Agreement and other franchise requirements before you make the decision to purchase a franchise. We will provide you with our assessment of the information disclosed in the Franchise Disclosure Document and our assessment of your rights and obligations and the franchisor's obligations to you under the Franchise Agreement by delivering to you a written memo and discussing it with you.
Congratulations to Alissa Verson on Being Elected as a DuPage County Bar Association Director
Congratulations to our associate Alissa Verson on being elected to the Board of Directors of the DuPage County Bar Association. She will fill one of the Director positions designated for lawyers practicing seven years or less. Since becoming a licensed attorney in 2016, Alissa has been getting involved in the DuPage County Bar Association. In March 2018 she shared her singing talents by performing in the DCBA's annual Judges' Nite musical comedy which is an annual fundraiser for the DuPage Legal Assistance Foundation.
The FDD annual update is done. Do we really have to amend?
All franchisors and their legal counsel focus on the annual Franchise Disclosure Document update that must be completed within 120 days of the franchisor's fiscal year end. Typically, everyone is relieved that the project is done for the year. However, franchisors have an ongoing legal obligation under both federal and state franchise laws to amend the FDD during the year if a material change has occurred.
Application by State Regulators of the NASAA Financial Performance Representation Commentary
As we previously reported last year, on May 8, 2017, the North American Securities Administrators Association (NASAA) voted to adopt a Financial Performance Representation Commentary for franchises (FPR Commentary). The FPR Commentary supplements the 2008 Franchise Registration and Disclosure Guidelines commentary issued by NASAA in 2009 and addresses questions that have been raised over the year by franchisor representatives and state franchise examiners about financial performance representations in Item 19 of the Franchise Disclosure Document.
State Franchise Registration Renewals in 2018
It will soon be that time of year when we will be working with our franchisor clients to prepare the required year-end updates to their Franchise Disclosure Document and file state registration renewal applications.
Happy Holidays from Carter & Tani!
During the holiday season, we pause to reflect on the past year and we are reminded of how fortunate we are on both a business and personal level. We are enriched in many ways by our relationship with our clients and business associates.
Illinois Businesses and Franchisors with Franchisees in Illinois - Beware of the Biometric Information Privacy Act
The Illinois Biometric Information Privacy Act has been in effect since 2008. There has been little awareness of this law until this year. Between July 2017 and October 2017, there have been at least 26 class action suits filed in the Illinois state courts by employees against their employers alleging violations of the Act. Companies being sued have included Intercontinental Hotels, Mariano's, Zayo Group, Peacock Foods, Superior Air Ground Ambulance Service, Bob Evans Restaurants, Hyatt Corp. and Alliance Ground International.
Illinois Businesses - Be Aware of the New Illinois Freedom to Work Act
The Illinois Freedom to Work Act went into effect on January 1, 2017 (820 ILCS 90). The Act is said to have been passed in response to Jimmy John's requiring employees to sign non-compete agreements that restricted the employees from being employed at businesses located with 2 or 3 miles of Jimmy John's locations if the business obtained more than 10% of their revenue from the sale of menu items similar to the Jimmy John's menu items.
What are the Registration and Disclosure Requirements in Franchise Transfers?
Franchisors should not mistakenly assume that a sale of an existing franchise business by the franchise owner is not subject to the registration and disclosure requirements of the franchise laws. When a franchisee is selling its franchise business, is the franchisor obligated to provide the prospective buyer with its current Franchise Disclosure Document? If the franchise business is in a franchise registration state, does the franchisor have to be registered to offer and sell franchises in that state for the franchisee sale/transfer to take place?
