Roberts/McKay v C.R. England
Latest Blog Entries.
Friday, September 30, 2011 7:13:26 PM
The Case for More, Not Less, Franchisee Protection
Current franchise laws and regulations do not go far enough to protect the interests of franchisees against often times overreaching franchisors.
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Friday, September 30, 2011 7:10:28 PM
Support the Arbitration Fairness Act of 2009 (House Bill 1020)
Federal appellate courts continue to put their full weight behind arbitration and erode the flexibility of judges to set aside or at least limit one-sided arbitration schemes and results.
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Friday, September 30, 2011 7:08:48 PM
Welcome to Franchisee Law Blog
Lagarias & Boulter, L.L.P. devotes itself to keeping up-to-date on issues important to the franchising community and to franchisees in particular.
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FAQs - Answers
5. What do you mean
by the term “Franchise Laws”?
Various state legislatures have passed laws that
generally govern two differing aspects of general franchising. The Congress has
not enacted any specific federal franchise legislation. However, the federal
government has permitted the Federal Trade Commission the ability to promulgate
rules and regulations regarding certain aspects of franchising. The FTC has
promulgated a disclosure obligation known as the Franchise Rule. Under the
Franchise Rule franchisors are required to provide franchisees with certain
information about the prospective franchise investment. The document required by
the FTC rule is more commonly referred to as a FDD or Franchise Disclosure
Document, formerly known as a Uniform Offering Circular. Under the federal
regulation, there is no required registration of the franchise documents with
any federal agency or entity. In addition, there is no private right of action
for a violation of the FTC rule. However, as noted elsewhere, some states adopt
the FTC rule or the standards of the FTC rule as the predicate for violations of
other statutes and/or certain common law duties.
A number of states have
enacted both disclosure and registration requirements for franchisors to meet
independent of the FTC rule. In these states, it is incumbent upon franchisors
to comply with the requirements as noted in the various laws. If franchisors do
not comply with the requirements, they may be subject to liability. A number of
states prohibit the use of misleading devices, misrepresentation s, and
concealment of information that would be important for franchisees to know about
the opportunity. In these states, actions can be brought for such statutory
violations. An experienced franchise attorney can advise you as to whether any
of these various state laws may be applicable to your particular situation. The
fact that you do not reside in the state that does not have such a law, does not
automatically mean that you may not be able to be afforded the protection of the
franchisor’s home state franchise statutes. Therefore it is important for you to
obtain the advice and counsel of an experienced franchise attorney.
A number
of states also have franchise relationship statutes which govern the termination
and non-renewal of franchises. Thus, a franchisor who refuses to renew a
franchisee for reasons are not permitted under the law, may be subject to an
action for violation of the franchise relationship statute. Again, it is
important for franchisees to consult with experienced franchise attorneys to
determine what protections may be afforded under various state relationship
laws. Finally, there does exist state and/or federal legislation governing
specific types of franchises including alcohol distributors, automobile dealers,
farm equipment dealers, petroleum dealers, and wholesale distributors. An
experienced franchise attorney can be consulted as to the applicability of such
statutes.