W1: Differential Treatment of Franchisees in Tough Economic Times
Different strokes for different folks isn’t always the best policy, especially when it comes to treating franchisees differently. While franchisors may generally strive to treat all similarly situated franchisees in the same manner, the recent economic collapse has created difficult issues for some franchisors. What is a franchisor to do when a significant part of the system is not paying royalties? Can and should a franchisor require upgrades to franchised units in the current economy? Can upgrades for some units properly be deferred? Should the franchisor consider royalty concessions and, if so, must those concessions be offered on a system-wide basis? What claims are available to franchisees or franchisee associations that are arguably impacted by such discrimination.
Speakers:
Jeffery S. Haff
Kevin Moran
Roger Schmidt
W2: Savvy Litigation Strategies for the Franchise Lawyer
Franchise litigation requires careful thought and maneuvering. Between the initial client interview and receipt of the final judgment, strategic decisions must be made, sometimes on a daily, or even an hourly, basis. This mid-level workshop will discuss methods employed by experienced franchise counsel in discernment of the client's goals in the litigation, formulation of strategies for achieving those goals, and the initial analysis of claims. The panel will focus on how to most effectively and efficiently obtain the key facts necessary to be able to professionally recommend, and strategize with the client about, the best "next steps." The panelists will also share practical ways to ask the right questions in order to learn what the client actually wants to achieve, and will discuss methods for managing client expectations along the way. Discussion will also delve into the most opportune moments to approach settlement and other means for resolution of the case, including mediation and alternative dispute resolution methods. Join our expert panel in exploring the meatier questions faced by franchisor and franchisee counsel when counsel become the strategists in a lawsuit.
Speakers:
Deborah S. Coldwell
J. Michael Dady
W3: You Don’t Want to Be a Franchise? - Structuring Business Systems Not to Qualify as Franchises
Clients often ask that their business system be structured to avoid the franchise laws. This program will review the practical issues involved in designing programs that fall outside the purview of the franchise laws, focusing on definitional elements, exemptions and exclusions, and administrative and case law interpretations of statutes and regulations as applied to distribution and licensing arrangements. The program will also serve as an opportunity for in-house and outside franchise practitioners to better understand the alternatives to franchising and how to avoid creating an “accidental franchise” when structuring these business systems.
Speakers:
Ann Hurwitz
David W. Oppenheim
W4: Going International: What Additional Restraints Will You Face?
International franchising is important to franchisors concerned about brand expansion, particularly mature franchise systems operating exclusively or principally in the United States. However, entry into foreign markets brings a myriad of risks, including the Foreign Corrupt Practices Act (FCPA), other anti-bribery laws worldwide and different competition regimes such as the new European antitrust rules applicable to franchising contracts (EC Regulation 330/2010 on vertical restraints). During this program the panel will discuss the FCPA, the EC regulation and other relevant laws and regulations and their implications for international franchisors; emerging issues that international franchisors should be aware of; and best practices to ensure compliance with the FCPA, other anti-bribery lawa and competition laws in the EU and worldwide.
Speakers:
Jeffery A. Brimer
Alison C. McElroy
John Pratt
W5: The Five Most Litigated Provisions in the Franchise Disclosure Document
This program will explore the most common deficiencies in franchise disclosure documents and how those deficiencies may serve as the basis for system-wide litigation. The speakers will review case law relating to deficient franchise disclosure documents and the resulting consequences for both franchisor and franchisee. Disclosures discussed will include financial performance representations, supplier rebates under Item 8, development and/or competing units under Item 20, territorial rights/restrictions disclosures under Item 12 and financial information regarding start-ups under the initial investment requirements in Items 5-7. This program will provide tips on how to spot, and how to defend, potentially costly common deficiencies.
Speakers:
Gregg A. Rubenstein
Robert F. Salkowski
W6: Best Practices in the Use of System Advertising and Marketing Funds
Pooling advertising and marketing funds from all of the franchisees in a system can provide much greater purchasing power and therefore marketing reach, but it can also provoke system-wide controversy. This workshop will feature a discussion of how advertising funds are disclosed in the franchise disclosure document, how they are generated and the acceptable uses of advertising fund dollars, with a focus on new or developing trends. What concerns are triggered if franchisees contribute at different rates, if company-owned units contribute on a basis different from franchisees, if in-house marketing departments are used, if the franchisor or its affiliates have competing systems, if new advertising options are used that are not expressly addressed in the franchise agreement, or if expenditures are made that benefit one franchisee or group more than others? How does a franchisor obtain franchisee buy-in on advertising decisions? The panelists will discuss these and other issues that can result from differing views on the appropriate scope of marketing activities to be supported by common funds.
Speakers:
Erika Amarante
Eric H. Karp
W7: Regaining Your Trademark After Abandonment or Misappropriation
In entering domestic and foreign market, a franchisor may have the unsettling experience of finding its trademarks already registered – by someone else! Other times a non-franchisor may re-enter a country after an absence only to find that its marks have been deemed abandoned and, once again, that its trademarks have been registered by a third party. While the relevant legal issues will vary with the facts of each case, what are the practical issues in seeking to enforce trademark rights? Can the mark be purchased for a reasonable price? Is litigation cost effective in reducing the price? Does it make sense to bring the “squatter” in as a franchisee in consideration of surrender of the mark? This workshop will draw on the experiences of the panelists in defining best practices.
Speakers:
Christopher P. Bussert
Jennifer Dolman
W8: Streamlining the Franchise Disclosure Process
It has been four years since the FTC issued its amended FTC Rule and guidance on implementing electronic disclosures. During that period, franchisors have explored a variety of e-disclosure techniques in an effort to reduce the cost of creating and distributing franchise disclosure documents, expedite the entire disclosure process and thereby reduce the length of required stop-sales periods on annual renewal and for interim amendments. This program will review the laws, rules and regulations governing e-disclosure, survey the different forms of e-disclosure being used by franchisors, and examine the benefits and challenges of each. The program will provide a road map for creating an e-disclosure protocol for your clients that, once established, can be managed entirely in-house.
Speakers:
Nancy G. Gourley
Phyllis Alden Truby
W9: The Use of Consultants and Paralegals in Franchising
A current hot topic for the American Bar Association, state attorney regulatory bodies and state courts throughout the U.S. is the Unauthorized Practice of Law (“UPL”). In the franchise arena, this issue arises when non-lawyer consultants or paralegals provide counseling, drafting and processing services related to franchise agreements, franchise disclosure documents and franchise regulatory requirements. A franchise attorney employing or dealing with such non-lawyers must be aware of the numerous ethical issues involved. What ethical duties does the attorney have to his or her client who is relying on such non-lawyers? Does the attorney have duties going beyond the immediate client? Can the attorney be charged with aiding and abetting the unauthorized practice of law when he or she participates in the delivery of “bundled” franchise-related consulting and legal services, such as reviewing (and blessing) agreements or disclosure documents drafted by the non-lawyers, or drafting agreements or disclosure documents for use by the non-lawyers in their dealings with clients when the attorney is not directly involved? This workshop will examine franchise attorneys' ethical obligations arising from UPL and related laws from the point of view of the various state attorney regulatory schemes, considering the current state of the law, and recent national-level and state-level developments. It will also look at best practices for franchise attorneys to satisfy those ethical obligations, taking into account the different roles that consultants, paralegals and lawyers play in assisting franchise systems. (Ethics credit has been applied for)
Speakers:
Beata K. Krakus
Warren L. Lewis
Mario Altiery
W10: The New Era of ADA Compliance – What Does It Mean for Your Franchise System?
There has been an increased focus on the Americans with Disabilities Act (the “ADA”) in recent years, with both the plaintiffs’ bar and the Department of Justice taking a markedly increased interest in ADA compliance at franchised properties. In November of 2010, Hilton Worldwide, Inc. entered into an ADA-based Consent Decree with the Department of Justice impacting its owned, managed and franchised properties. This decree may have significant implications throughout the franchise industry. This workshop will provide an overview of the reported ADA cases, from the early Cendant/Days Inn cases to the recent Chipotle decision, that address the question of whether a franchisor is an “operator” of a franchised business under Title III of the ADA. This program will also consider recent investigations and consent decrees entered into with the Department of Justice by franchisors and the application, if any, of those decrees to their franchisees. The speakers will explore the future of the continuing distinction between franchisor and franchisee for ADA compliance purposes and the impact of the new 2010 ADA regulations on franchise systems.
Speakers:
Beth Esposito
Kathryn M. Kotel
Geoff Weirich
Renee Wohlenhaus
W11: Joint Representation of Franchisors, Their Officers, Employees and Affiliates in Litigation
Franchisees suing their franchisors often assert claims against officers, employees and affiliates of the franchisor, and many state statutes expressly provide for such claims. This workshop will consider the benefits and drawbacks of joint representation and explore both ethical and strategic issues that arise in franchise litigation and state regulatory proceedings against related defendants. The panelists will discuss the impact of joint representation on the attorney client privilege. They will also assess the benefits and drawbacks of joint representation in the context of criminal investigations. The program will conclude with best practices in dealing with conflicts of interest present in joint representation.
Speakers:
Leslie M. Smith
Eric L. Yaffe
W12: The Disappearing Franchisor
In a down economy, the incidence of franchisors simply disappearing or fading away, leaving their franchisees behind, may be on the increase. According to one Small Business Administration study from a number of years ago, as many as 75% of new franchise systems cease to franchise within 12 years after starting. What are the consequences of a disappearing franchisor? What becomes of the system’s franchisees? What, if any, value is left in the trademarks, logos, website, promotional materials, supplier contracts and other remnants of the former system? What rights do the franchisees have to continue using these assets? What claims and causes of action can be asserted against the franchisor, its officers, directors or other related parties? This workshop will grapple with issues far different from market withdrawal and will venture into territory that most franchisors and franchisees hope never to have to explore.
Speakers:
Carmen D. Caruso
Jon P. Christiansen
W13: Vendor Rebates: Considerations in Drafting and Litigating
Vendor rebate litigation continues to make news in franchise circles despite the perceived safe harbor of franchise disclosure document disclosure of all rebates. This workshop will survey the claims asserted in such litigation, ranging from common law fraud and negligent misrepresentation to violations of state consumer protection and unfair/deceptive practices laws as well as antitrust and other state and federal laws addressing kickbacks and brokerage payments. The speakers will also analyze the issues of drafting vendor rebate disclosures and how some disclosures have actually exacerbated litigation claims. Litigators will want to compare notes with the panelists who have worked through the range of potential claims and related responses, and transactional lawyers will want to learn what types of rebate arrangements will likely trigger the most scrutiny.
Speakers:
Lee N. Abrams
Robert T. Joseph
W14: When Is Control by Franchisors out of Control?
It is one of the most important choices a franchisor will ever face: how to maximize the franchisor’s ability to manage its brand and enforce system standards without blurring the status of its franchisees as independent owner/operators. This workshop will explore how far a franchisor should go to effect change through the modification of system standards and operations manuals; problematic words and deeds that can cause a franchisor to unwittingly become an employer or joint employer of its franchisees or their employees; and how a franchisor’s involvement in the manufacture, branding and distribution of goods and services can increase its risk of liability to both franchisees and consumers.
Speakers:
Fredric A. Cohen
David J. Meretta
Sandra J. Wall
W15: The Art of the Dispositive Motion in Franchise Disputes
This program will focus on drafting and arguing effective summary judgment and other dispositive motions, with an emphasis on issues that frequently arise in franchise litigation. The workshop will include practical suggestions on how parties should build their case from the outset to lead to or to defeat a dispositive motion, including how to determine whether a franchise case is suitable for such a motion; developing and implementing a strategy to move toward the motion; optimal timing for the motion; and changes in practice resulting from the 2007 U.S. Supreme Court decision in Bell Atlantic Corp. v. Twombly. The panelists will also discuss the types of arguments to be made, how they should be framed and the evidence necessary to support those arguments in order to be most persuasive in making or opposing such motions.
Speakers:
Diane Green Kelly
Tahlia Townsend
W16: Go to the Head of the Line: How to Get Registered, Amended, Renewed or Exempted
Nothing is more frustrating for franchisors and prospective franchisees than the inadvertent “dark period” or lapse of franchise registration effectiveness. Failure to maintain a current franchise disclosure document that is properly registered, where required, can wreak havoc on the franchise sales program and have damaging consequences for franchisees intending to close sales or loans by a deadline imposed by a seller or lender. This program will present the best practices franchisor counsel can employ when going through the registration, amendment and renewal process. The panelists will also explore alternatives to registration and disclosure, including the most readily available state and federal exemptions.
Speakers:
Anne Connelly
Patrick Maslyn
Timothy O'Brien
Dennis E. Wieczorek
W17: The Franchisee Lawyer’s Checklist: What Every Franchisee Lawyer Should Know
Franchisees frequently come to their lawyers in moments of crisis, whether the last minute before execution of a franchise agreement, the impending termination of a franchise agreement or worse, a termination letter with a demand to de-identify the property already in hand. This program will focus on the information the franchisee lawyer must obtain from the franchisee in order to adequately assess the franchisee’s situation and determine the leverage the franchisee may have to achieve its objectives. This program will help you understand whether your client has viable claims or defenses, what options the franchisee has in attempting to reach a business resolution to the problem and how to manage client expectations. It will also explore strategies and tactics for working with franchisor counsel in negotiating franchise agreements, transfers, renewals and terminations.
Speakers:
Julianne C. Lusthaus
Peter R. Silverman
W18: The Perils of Third Parties Selling or Servicing Your Brand
This workshop will discuss the various types and structures of broker and three-party arrangements utilized in franchising, along with the pros and cons of each for franchisors, franchisees and the brokers or representatives. This session will include an assessment of the key legal issues facing franchise sellers and the companies they represent, including who is a “franchise seller” within the meaning of the FTC Rule and applicable state laws; the differences between a franchise seller and a broker; licensing and registration obligations for brokers/representatives in various states; the franchisor’s obligations to disclose the existence of franchise sellers in various states; the franchisor’s responsibilities to ensure that franchise sellers are complying with applicable law; and the franchisor’s responsibilities to inform franchise sellers regarding material changes in the system.
Speakers:
Michael S. Levitz
Christina M. Noyes
Phillip L. Wharton
W19: The Unauthorized Use of Corporate and Individual Identities in Advertising
Even seemingly careful use of imagery, symbols, photographs and color in franchisor or franchisee advertising may result in unexpected and unwanted claims of trademark or copyright infringement, unfair competition or false endorsement as well as violation of the right of publicity or invasion of the right of privacy. Whether the advertiser relies on a third party vendor or prepares advertising, website content or other promotional materials in-house, franchisors and franchisees alike may face claims of illegal use of others’ intellectual property. In addition, any such use might trigger claims under the latest FTC privacy or product endorsement regulations. Our panel will discuss the intellectual property issues raised by such advertising, the lines drawn by federal and state regulations, how these claims typically arise, and best practices to help insulate advertisers from missteps.
Speakers:
Natalma M. McKnew
Clay A. Tillack
W20: Managing System Impact When Applicable Laws Change
One virtually universal provision in franchise agreements is the requirement that the parties obey all applicable federal and state laws. Franchisors generally select a governing law to harmonize interpretation of the franchise agreement and protect the interests they consider important at the time of contracting. This program will examine how the franchise system, and the respective rights of franchisors and franchisees, can be affected when changes occur to significant applicable laws that may be “baked into” the franchise agreement or other components or practices of the franchise system. The panelists will focus on dealing with traditionally volatile laws, such as the interpretation of non-competition covenants and resale price maintenance restrictions, with sea changes such as healthcare reform, and targeted policy changes such as the Kansas prohibition of indemnification. This program will also review tips for drafting franchise agreements to address changes in law that could fundamentally impact the franchise relationship.
Speakers:
Ted P. Pearce
Joel R. Buckberg
W21: Go East Young Franchisor: Franchising in Asia-Pacific Other Than in China and India
Continuing the popular series of programs dealing with global regional differences in franchising practice, this program will survey the different models for franchise regulation – in particular, franchise disclosure laws and franchise relationship requirements in Asia-Pacific countries such as Australia, Indonesia, Japan, Malaysia, South Korea, Taiwan and Vietnam – which have made franchising in Asia the most legally intensive market to enter today.
Speakers:
Stephen Giles
Andrew P. Loewinger
Sherin Sakr
W22: The Fight over Where to Fight: Removal, Transfer of Venue, and Compelling Arbitration
This program will examine the strategic fight over “where the dispute must be resolved.” Specifically, the program will discuss the considerations and tactics for selecting a state court or federal court forum; strategies related to petitions for removal as well as motions for remand; and the tactical maneuver of moving to transfer venue based on the existence of a forum selection clause, a claim of forum non conveniens, or a claim of lack of personal jurisdiction. The workshop will also examine motions to compel arbitration and the two front war often caused by actions to enjoin arbitration proceedings or the continued litigation of claims carved out of the arbitration clause (such as injunctive relief). Additionally, the program will examine attacks on the enforceability of the arbitration clause itself as well as efforts to compel or prevent non-parties from arbitrating. The panelists will analyze the law governing enforcement of forum selection and arbitration clauses, and will provide practical tips on the choice of such provisions in clients’ franchise and other agreements.
Speakers:
Michael J. Boxerman
Jason M. Murray
James Susag
W23: The Ultimate Remedy: Managing Regulatory Enforcement Actions
Nothing concerns a franchisor like an inquiry from a federal or state regulator relating to the content and quality of their franchise disclosure document or franchise sales practices. What are the current enforcement issues facing state and federal franchise regulators? Has the downturn in the economy affected the number or nature of violations? Are all transgressions created equal? Has the number of franchisees taking advantage of statutory offers of rescission increased? What are examiners’ specific thoughts on the process? What are some of the the best practices to manage the process and minimize the impact of a regulatory inquiry? This workshop will address these weighty issues and also analyze the rescission offer process generally, the life cycle of enforcement proceeding and the alternatives franchisors and franchisees involved in them may have.
Speakers:
Martin Cordell
Mark B. Forseth
Brian B. Schnell
W24: Comparison of the Trilogy: Common Law Fraud, Franchise Investment Laws & State Little FTC Laws
Franchisees often bring these claims in tandem against franchisors, but few courts have distinguished the liability and remedy nuances of these three similar, but different, claims. This program will examine scienter requirements, types of misrepresentations and omissions, the impact of integration clauses, no representation and non-reliance clauses, causation issues, reliance damages and the remedy of rescission. It will also examine how, in light of the FTC Rule, the use of disclaimers in franchise disclosure documents and franchise agreements can impact those claims as well as language franchisors should consider using to protect themselves in their franchise disclosure documents and franchise agreements.
