State Developments – New Jersey

We have recently posted about interesting developments in franchise legislation in states like Pennsylvania and Massachusetts. This post touches on a recent judicial interpretation of existing legislation in New Jersey. Not all business arrangements fit neatly into the definition of a franchise. This often leads to litigation to determine if specific business relationships qualify for each state’s […]

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Massachusetts Fair Franchise Act

We have previously written about the development of a franchisee-friendly franchise act in Pennsylvania. Similar laws are under consideration elsewhere, possibly signaling a state-level sea change in how franchising is regulated in this country. The legislature in Massachusetts is currently considering the Massachusetts Fair Franchise Act, an act designed to protect small business investments. The

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The Cost of Raising Minimum Wage

In the last several weeks, the issue of increasing the minimum wage (the federal mandate is for $7.25) has been the subject of much discussion in the press and within municipal governments.  There are proposals pending to increase the minimum to as much as $15 an hour, more than twice the rate that the federal

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Pennsylvania Franchise Law

A new house bill introduced in the Pennsylvania General Assembly seeks to “promote the vitality of franchising through fair, equitable and responsible franchise practices.” If the bill passes, its true impact is a fundamental shift in the relationship between franchisors and franchisees. The bill contains a number of intriguing provisions, a majority of which alter

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California Franchise Relations Act

A new bill in California that recently passed the California Senate may offer new protections for franchisees. The change comes as a result of decades of perceived unfairness to franchisors. With the new law, state legislators hope to level the playing field. This past February, Senator Hannah-Beth Jackson (D-Santa Barbara) introduced California Senate Bill 610, today

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Leveling the Playing Field

The State Legislature of Ohio recently amended the Ohio Business Opportunity Law. The new version aims to increase the protections for Ohio franchisees from abusive franchising practices, including those relating to franchise disclosures by franchisors. The Ohio Business Opportunity Law was passed in an effort to “protect prospective purchasers of business opportunity plans by requiring

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Exclusive vs. Non-Exclusive Territories

The franchise disclosure document (FDD) and franchise agreement that this firm typically creates for franchisor clients does not grant an exclusive territory to franchisees. Rather, the FDD defines a specific geographic territory and provides the franchisee with certain territorial protections against competition. Notwithstanding those protections, certain rights are reserved for the franchisor. In many cases,

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Exemptions from Disclosure Under FTC Rule

The FTC Franchise Rule, as originally enacted in 2007 and effective July 1, 2008, required that franchise sellers provide a prospective franchisee with a franchise disclosure document unless: (i) the prospective franchisee’s initial payment is less than $500; (ii) the prospective franchisee’s initial investment is at least $1,000,000 (excluding the cost of unimproved land); (iii)

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Fair Franchising Acts Gaining Support

A number of states are attempting to level the playing field between franchisors and franchisees by passing so-called “fair franchising” acts. Rhode Island enacted three years ago; California, Vermont and Massachusetts are all poised to act on their version during their current legislative session. In essence, the acts aim to solve a perceived problem of a

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