When drafting a franchise agreement, a franchise attorney typically will draw upon past agreements and provisions that have stood up to challenge and judicial scrutiny. At the same time, the drafter will rework or add provisions that are designed to address (and avoid) issues that have arisen in disputes involving their own or other franchise companies. However, these agreements can be extremely long and cumbersome and, in many cases, are overwhelming to prospective franchisees. This session will focus on striking a balance between lengthy and cumbersome franchise agreements and a more pragmatic form of agreement. To that end, the panelists will identify those provisions that are necessary for the protection of the system, those provisions that may arguably be over-kill and techniques for making the franchise agreement shorter and easier to read and understand.

Speakers:      Timothy J. Bryant      Susan A. Grueneberg      Jane W. LaFranchi

One of the hottest legal issues in franchising is the classification or misclassification of franchisees in their relationships with franchisors: are they independent contractors or employees? Recent decisions involving Coverall, Jani-King and Subway highlight the need for franchisors and franchisees to know what factors may result in an unintended employment relationship. These same issues should be of concern to franchisees with respect to independent contractors they retain in their business. The workshop will examine the growing number of cases in this area, applicable statues and what the parties should consider from a business standpoint to minimize the risk of their relationship being deemed an employment relationship. The speakers will also examine whether these issues mandate a legislative solution.

Speakers:      John F. Dienelt      W. Michael Garner      Patricia Slovak

The protection of trade secrets and confidential information has become more of a challenge given the free flow of information via the Internet. The panel will discuss a variety of issues such as the definitional differences between trade secrets and confidential information; best practices for maintaining adequate security for franchise system trade secrets and confidential information that are stored electronically within the company and disseminated to franchisees; contract, technical, and legal issues raised by franchisee Internet portals; exit strategies including checklists for dealing with departing employees and franchisees; uncovering the tracks with effective use of computer forensic examination experts; and “computer crimes”—use of the Computer Abuse and Fraud Act, state computer crimes statutes, and common law doctrines to protect franchise trade secrets and enforce non-disclosure agreements.

Speakers:      Michael J. Lockerby      James Mittenthal      Heather Carson Perkins

In the franchise sales process, the first question is often “How Much Money Will I Make?” However, only about 30% of franchisors include Financial Performance Representations (“FPRs”) in their Franchise Disclosure Documents. This session will explore the legal and business considerations involved in using an FPR in the Franchise Disclosure Document, the different types of FPRs a franchisor may make, best practices for reviewing client data and preparing the FPR, and an overview of state regulators’ current responses to FPRs contained in Item 19. The workshop will delve into counseling clients on using the Item 19 disclosures in the sales process, including the legal limitations on such use, the use of supplemental FPRs and general media claims. The panel will discuss how the FPR can be drafted in a manner that is most relevant for prospects and identify typical concerns and challenges to FPRs raised by franchisees in litigation.

Speakers:      Gary R. Batenhorst      Charles S. Modell

With the globalization of franchising comes the dilemma of how to address the inevitable international disputes that will follow. What are the best practices in choice of law and forum provisions in international franchise agreements? When should a franchisor or master developer require arbitration, mediation, or both? The proliferation of centers such as the International Centre for Dispute Resolution (the AAA’s international arm), and the London Court of International Arbitration, can provide a confusing array of choices as can the various procedural rules involved. These experienced panelists will provide insights into the comparative benefits of these forums and rules and how parties are in fact choosing to resolve their international franchise disputes.

Speakers:      Ronald K. Gardner, Jr.      Peter J. Klarfeld      Geoffrey B. Shaw

Franchise agreements have often been characterized as “take it or leave it” deals. However, franchise lawyers know (or should know) that there are often many matters about which a franchisee and franchisor will or can negotiate before finalizing the contract. In this session, the panelists will provide practical insight to negotiating a franchise agreement – what leads parties to negotiate, what provisions can be negotiable, what types of provisions are favored and disfavored and what strategies can be used to enable the attorney to meet his or her client’s needs in getting to “yes”. The workshop will provide a lively discussion of these issues, with a focus on presenting and debating some of the key areas of interest that are brought to the table by the franchisee, the franchisor and their lawyers.

Speakers:      Harris J. Chernow      Kerry J. Olson      Rebekah K. Prince

As franchising has matured, so have the practices of franchise attorneys. Many attorneys now have decades of experience, representing a large variety of franchise companies and franchisees. For years, they have been called as expert witnesses in legal malpractice lawsuits involving franchise matters. In addition, they are now increasingly called upon to provide expert testimony in cases between franchisors and franchisees. This workshop will address when it may be beneficial to hire one of your peers as an expert, whether it is appropriate, and circumstances where the attorney/expert’s testimony may be struck. The workshop will discuss strategies in the depositions of such experts, including how to prepare lawyers as witnesses, how to get the most of their testimony on direct, areas of attack on cross-examination, and mistakes that are made by litigation counsel in handling such witnesses.

Speakers:      Rupert M. Barkoff      Charles G. Miller      Trish L. Treadwell

Every franchise lawyer should have a basic understanding of the antitrust laws affecting franchise systems. This workshop will provide an overview of these laws and their implications, including a discussion of the key antitrust cases affecting franchising. The panelists will explain, among other things, the effect of antitrust doctrine on the business of franchising, including a discussion of resale price maintenance and tying. The workshop also will address how state antitrust laws mesh with federal laws and how private enforcement differs from public enforcement.

Speakers:      Kay Lynn Brumbaugh      Allan P. Hillman

For transactional franchise lawyers, there may be no harder task than advising a client on what changes to the franchise system require an amendment of the Franchise Disclosure Document. This workshop will analyze the concept of “materiality” in the context of whether an amendment of the Franchise Disclosure Document is required based upon the specific events at issue. The panelists will identify best practices for tracking potential changes to the information disclosed during the period when the Franchise Disclosure Document is effective. Since the decision not to disclose a fact or situation may become the basis of a lawsuit by a franchisee, the panel’s franchisor and franchisee litigators will offer their insights on this issue. The workshop will also include a discussion of the relevant legal requirements and practical considerations related to a disclosure, such as the timing for disclosure and re-disclosure obligations.

Speakers:      Marisa Faunce      Natalma “Tami” McKnew      Nicole Zellweger

Arbitration is a unique forum involving multiple strategic decisions by franchisor and franchisee counsel, even before an arbitration demand is filed. This workshop will focus on prehearing decisions and strategies involving arbitrations. Who may invoke or avoid an arbitration clause? How do state law principles of unconscionability impact arbitration? May franchisee groups or associations bring arbitration claims? Along with venue, injunctive relief, consolidation, panel composition, and parallel court action, these issues present counsel with multiple opportunities for procedural parries that require careful evaluation and consideration. Hear the latest and best strategies from experienced practitioners regarding practical, legal, financial and tactical considerations when a dispute arises between franchisor and franchisee that may involve arbitration.

Speakers:      Justin M. Klein      Arthur L. Pressman

Even for experienced franchise lawyers, confusion can arise when counseling clients on the models available for multi-unit development. This confusion is primarily related to the lack of clearly defined terms describing the different types of structures and the imprecise use of these terms by many franchise professionals. This panel of experienced franchise lawyers will walk the participants through the different types of multi-unit development arrangements, including reviewing the terminology related to each type of arrangement, identifying the differences related to each type of arrangement, discussing the legal and business reasons for using one type of arrangement over another, including the use of multi-unit agreements in international transactions, and identifying drafting considerations related to these agreements. The panelists will also discuss NASAA’s attempts to bring clarity to certain issues related to multi-unit development structures and identify state registration and disclosure laws that can trip up unsuspecting lawyers when it comes to these issues.

Speakers:      Sarah J. Yatchak      Will K. Woods

The Great Recession has seen franchisees and lenders doing the traditional foreclosure-bankruptcy dance to new music due to new motivations. If collaterized mortgage-backed securities (“CMBS”) financing is in default, are franchisees who are CMBS borrowers more likely to send the lender “jingle mail” (“here are the keys, lender”) or is the increase in jingle mail the economy, stupid? What is it about CMBS loans that might make some franchisees more willing to turn over the keys? Why and how do the motivations of CMBS special servicers differ from traditional lenders and their Real Estate Owned activities and how does this affect everyone’s post-default decisions? What aspects of the bankruptcy law affect these decisions and how has bankruptcy changed from previous downturns. This Workshop will place the current franchisee-lender dance in the context of these answers and explain how this affects best practices for franchisors dealing with franchisee defaults on their debt, either in the context of the franchisee defaulting only on its primary debt or on all of its obligations to the franchisor and other creditors.

Speakers:      Steven M. Goldman      Carolyn J. Johnsen      Glenn D. Moses

All franchise systems face the problems of franchisee non-compliance with various provisions of the franchise agreement. Although franchise agreements typically set forth a contractual process for addressing franchisee defaults, there is more to the default and termination process than meets the eye. This workshop will address business and legal issues that franchisors should consider both before and during the process of defaulting and terminating a noncompliant franchisee; deciding whether taking action is in the best interest of the franchise system and other franchisees; assessing the franchisee’s (and any personal guarantors’) financial situation; reviewing internal files and communications that might contain red flags about possible claims by the franchisee; and determining whether there are potential systemic issues that are better addressed without invoking the default process. The panel will also discuss how a franchisee might best respond to a default notice, including whether to attempt an untimely cure, how to best document franchise compliance and how to attempt a pre-suit resolution.

Speakers:      Karen C. Marchiano      Glenn J. Plattner       Leonard D. Vines

Franchise systems inevitably change in an effort to remain relevant and meet shifting customer perceptions and marketplace demands. To effect change, nearly all franchisors reserve some right in their franchise agreements to modify the operating standards for their franchise systems through changes to the operations manual and other communications with their franchisees. However, at some point, does changing a system standard become a material modification of the parties’ underlying agreement? In these cases, how can franchisees be encouraged to accept such changes where agreement terms make change difficult? This workshop will address the competing views on what changes can/should and cannot/should not be made to a franchise system through non-contractual modifications and will review cases discussing the breadth and limits of permissible change.

Speakers:      David A. Beyer      John Dent      Himanshu      M. Patel

This workshop will focus on the building blocks of a franchise system supply chain, both purchasing and distribution. The workshop starts with underlying franchise agreement provisions and special supply chain issues in the context of franchisor/franchisee relations. The speakers will analyze the terms of franchisee participation in supply chain arrangements, from franchisee controlled purchasing co-ops to purchasing committees to advisory boards.The panelists will discuss supplier and distributor selection, requests for proposal and the RFP review process, and provide checklists of terms and conditions for master agreements with approved system suppliers across the spectrum from proprietary items to core products to generic supplies. The workshop will address the mechanics of purchasing and distribution including pricing policies, ordering mechanisms, delivery and key drops, inspections and returns, invoicing and payment and remedies for nonperformance. Special issues will include importing supplies from overseas, private labeling, and captive distribution. This workshop excludes antitrust issues. It focuses on the nuts and bolts of an effective and efficient supply chain.

Speakers:      Gina Romo      R. James Straus      Suzanne Loonam Trigg

Irreparable harm is one of the most important elements necessary to establish a right to injunctive relief. Historically, irreparable harm was presumed if a party was found to have infringed another’s trademark rights, resulting in a lesser burden of proof for injunctive relief. The U.S. Supreme Court’s 2006 decision in eBay, a patent infringement case, concluded that the presumption of irreparable harm is not always a given. Since that decision, trademark, trade secret and copyright defendants have argued, with some success, that an owner of intellectual property must actually prove that it has suffered irreparable harm, as a prerequisite to injunctive relief. This workshop will discuss eBay and its progeny and analyze the elements that may be necessary to obtain injunctive relief in light of the changing case law.

Speakers:      C. Griffith Towle      Robert Zarco

All franchise practitioners are familiar with contractual provisions restricting in-term and post-term competition with the franchised business. In recent years, there has been an increase in litigation of these provisions and greater scrutiny of their validity by courts, in a variety of contexts. This session will provide a summary of recent developments that impact the drafting and enforcement of covenants against competition, with an eye towards drafting noncompetition provisions that on the one hand meet the needs of the franchisor but on the other hand are not unduly restrictive of the franchisee’s activities. The panelists will discuss legislation and legal decisions that have altered the landscape of what constitutes a protectable interest, the use of non-solicitation agreements in lieu of, or to supplement, non-competes, whether the scope of a restriction is reasonable and who is subject to a contractual non-compete.

Speakers:      Nina Greene      Ellen R. Lokker

Navigating the franchise registration and compliance process with state franchise regulators can be time consuming and expensive. This workshop will cover effective strategies for submitting franchise registration and exemption applications, responding to comment letters, and getting the golden ticket – the approval letter! Beyond registration, the panelists will discuss best practices for addressing informal administrative investigations involving a franchisor’s sales practices before they escalate into formal complaints. The panelists will offer practical tips for efficiently getting and keeping your clients fully compliant with state franchise registration laws.

Speakers:      Shelly Harris-Horn      Theresa Leets      Susan Meyer      Shelley B. Spandorf

As franchisors look for new and different markets, many are considering expansion into less commonly considered international markets that they may have initially overlooked. Though these markets may be less frequented by franchisors, many still have franchise-specific laws, regulations, and protocols with which franchisors must comply. In many instances, there is little guidance regarding the specific requirements of franchise disclosure documents and the form and content of franchise agreements in these countries.   The jurisdiction and application of the relevant franchise statutes may also be unclear. The panelists will discuss the unique challenges faced in franchising in these less conventional but regulated markets, provide tips on how to overcome these challenges, and discuss the unexpected benefits that come with planting the flag in new terrain.

Speakers:      Michael Laidhold      Karen B. Satterlee

In addition to franchise agreements and Franchise Disclosure ocuments, franchise systems need a variety of ancillary agreements to operate successfully and help further define the expectations of both the franchisor and the franchisee. These contracts are necessary at all stages of the franchise relationship. Examples of commonly used ancillary agreements include option agreements, letters of intent, confidentiality agreements, broker agreements, promissory notes, personal guaranties, software license agreements, transfer agreements, terms of use agreements for shared networks and online access, collateral assignments of lease agreements, supplier agreements, telephone number assignment agreements and termination agreements. This workshop will provide in-house and outside franchise practitioners with best practices for creating template forms that can serve as the starting point for contract negotiations and effective system administration.

Speakers:      Alan R. Greenfield       Kathryn M. Kotel

The standard miscellaneous provisions of a franchise agreement are often overlooked, unless and until they become the subject of dispute. The panelists will identify those standard provisions that are most frequently litigated and discuss the lessons learned from the case law where these provisions have been in dispute. These include provisions relating to contract modification, disclaimers, integration, forum selection, contractual statutes of limitations, governing law and clauses attempting to require neutral interpretation of the franchise agreement. Come hear how two seasoned litigators use these provisions to the benefit of their clients and how these provisions can sometimes result in unintended consequences.

Speakers:      John D. Holland      William K Whitner

Facebook, Twitter and other social media have enabled lawyers to communicate more easily with the public at large and to tout both their credentials and accomplishments. Lawyers need to be certain that their use of these new client development tools comply with ethical obligations. What are the best practices for using these tools to promote your practice? When do communications via these new avenues regarding recent successes cross the ethical line? What restrictions exist on law firm web pages to discussing recent case results or individual accomplishments? This workshop will provide case examples of the do’s and don’ts to keep in mind when it comes to using today’s social media, websites and advertising to tout your practice.

Speakers:      Constantine T. Fournaris      Kat Tidd

Group actions are common in the franchise setting. This workshop will focus on the procedural devices best used to pursue and defend claims involving large numbers of parties, in both the non-class and class action context. The panelists will analyze when a franchisee association is an appropriate party to maintain such a claim, the procedural considerations on whether the case should be maintained as a class action, what claims are appropriately brought on behalf of large numbers of individually named franchisees, and when separately filed lawsuits should be consolidated as a single mass action. The panelists will also identify the factors to be considered when franchisees deploy "mass actions" as a means of leveraging system-wide relief, or redressing system-wide wrongs.

Speakers:      Joseph S. Goode      William L. Killion

For many U.S. franchisors, expanding across our borders into Canada and Mexico is a natural and logical progression for system growth. This workshop will focus on practical and legal issues that U.S. franchisors should consider when granting franchise rights in these countries. This workshop will address the unique challenges associated with franchising in Canada and Mexico, including common methods of expansion, corporate and tax structures, disclosure regimes, modification of franchise documents (including modifications that are legally required and those that may be necessary for business purposes), trademark protection, competition laws, relationship law concerns, and enforcement and dispute resolution issues including class action practices. Finally, the panelists will touch upon issues such as the differences in language, culture and legal systems, as well as business issues that must be addressed as a prerequisite to expansion.

Speakers:      Joseph Y. Adler      Michael K. Lindsey      Ramiro Rangel Sánchez