Franchise and Distribution Law Update: Summer 2011

08/12/2011 / Franchise and Distribution Practice Group

 

In the Summer 2011 Issue:

 


NASAA Proposes Model Franchise Exemptions


The North American Securities Administrators Association (NASAA) is proposing model language for states to use to promulgate exemptions from registration and disclosure provisions under current state franchise laws in four categories: (1) a fractional franchise exemption; (2) an experienced franchisor exemption; (3) a set of three sophisticated purchaser exemptions; and (4) a discretionary exemption.  The proposal incorporates certain elements of existing exemptions already followed in several franchise registration states and recent changes in the FTC Rule on Franchising, but seeks to help franchisors achieve uniformity throughout the states.

NASAA sought public comment on the proposed exemptions in July. Only six comments were received, but among them were comments submitted by Larkin Hoffman’s Chuck Modell. NASAA will now consider the comments received, hopefully modify the proposed exemptions to address the comments and either issue a revised proposal if any comments are accepted, or adopt the original proposal and send it to the states.
 

Appellate Court Rules Franchisor is Not Franchisee's Employer
 

On June 23, the Court of Appeals of Georgia announced its decision in Jan-Pro Franchising International, Inc. v. Depianti finding that a Jan-Pro franchisee was not the employee of Jan-Pro under the Massachusetts Independent Contractor Statute.  The Court’s decision reversed an earlier decision by the trial court which had found on summary judgment that the franchisee did qualify as an employee of Jan-Pro under the Massachusetts law.
 

 

Supreme Court Ruling Restricts Class Actions
 

On June 20, the U.S. Supreme Court released its opinion in Wal-Mart Stores, Inc. v. Dukes, et. al. and by a 5-4 decision threw out a mammoth employment discrimination class action against Walmart that had sought billions of dollars on behalf of as many as 1.5 million female workers who had been employed by the company.  The case is important to franchisors because the logic used by the Court to determine that class action status was not appropriate is similar to arguments that franchisors make in cases brought against them by franchisees seeking class certification.
 

New Developments:

  • Minnesota Posts Franchise Documents On-line
    The Minnesota Department of Commerce is now posting franchise documents, including franchise disclosure documents and franchise application documents, on-line through its website.  The franchise documents are found under the tabs for “Licenses, Registration, Certification” and then “Franchise Registration.”  There is no cost to download the documents. 

 

Announcements:

  • Larkin Hoffman Franchise Team Earns Top Rankings
    Larkin Hoffman’s franchise team was again named among the top law firms in franchise law in the nation, and Chuck Modell and Joe Fittante among the nation’s top franchise lawyers, in the 2011-2012 rankings by Chambers USA. The Chambers rankings are based on extensive research conducted by Chambers and Partners Legal Publishers, a highly respected English research firm that publishes directories assessing and ranking the world's leading lawyers.

    The Larkin Hoffman franchise team was also recently listed as a Tier 1 firm in franchising in Minnesota, and among the top national firms in franchise law in the 2011 US. News-Best Lawyers "Best Law Firms" rankings.
     
  • Fittante Becomes Head of ABA Forum on Franchising
    Larkin Hoffman’s Joe Fittante has become Chair of the American Bar Association Forum on Franchising, effective August 1, 2011.  Approximately 2,000 lawyers in the United States and throughout the world are members of the Forum on Franchising, which is considered to be the preeminent legal organization on franchising.  Joe will formally address the members of the Forum at the 34th Annual ABA Forum on Franchising being held in Baltimore, Maryland on October 19-21. 
     
  • Susag and Fittante to Speak at the ABA Forum on Franchising
    Larkin Hoffman’s Jim Susag will present on the topic “The Fight Over Where to Fight: Removal, Transfer of Venue, and Compelling Arbitration” at the 34th Annual ABA Forum on Franchising being held in Baltimore, Maryland on October 19-21.  Joe Fittante will speak on the “Fundamentals of Franchising®.”
     
  • Larkin Hoffman Teams Raise Money for MS and Cancer Research
    Team Larkin Hoffman participated in the MS 150 bike ride from Duluth, Minnesota to Minneapolis on June 10-11, raising over $32,000 to support research to find the causes and cures of MS.  Larkin Hoffman also sponsored a rest stop on the first day of the ride. 

    On August 5, the Larkin Hoffman Legal Eagles participated in the Bloomington Relay for Life and through its fundraising efforts raised over $10,500 for the work of the American Cancer Society.
     

 

Contact our Larkin Hoffman Franchise and Distribution group members:
Charles Modell
Email 952-896-3341 

 
Cynthia Klaus
Email 952-896-3392
 

 

Ryan Shannon
Email 952-896-3313 
Joseph Fittante, Jr.
Email 952-896-3256
 
Pamela Merkle
Email 952-896-3337
 

 

Susan Tegt
Email 952-896-3325

 
William Thornton
Email 952-896-1578
 
Andrew Perrin
Email 952-896-3394 

 
James Susag
Email 952-896-1572
 
Edward Driscoll
Email 952-896-3235 

 
 

This alert is provided as a service to our clients and firm associates.  While the information provided in this publication is believed to be accurate, it is general in nature and should not be construed as legal advice.