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News Briefs
Franchise Compensation Survey 2011 Released
FRANData's “Franchise Compensation Report 2011,” released late last year, found that general counsel to franchise firms earned a median salary of $180,000, in-house attorneys earned a median salary of $101,000, and paralegals earned a median salary of $45,000.
Due to minimal overlap in franchise companies that responded to both the 2009 and 2010 surveys, FRANData aggregated the responses from those two years and it did not issue comparative figures that would show compensation trends. Given the weak economy, FRANData assumed that salaries did not increase from 2009 to 2010.
For purposes of comparison, in-house attorneys were grouped in a job function category with management-level employees of franchises, including human resources, compliance, field operations, marketing, and site selection. Attorneys' median salaries were about 30% above managers in each of those categories, though their full compensation was much closer to the average because other positions typically received larger bonuses and other forms of compensation.
The survey also revealed that in-house attorneys said they spend 78% of their time on legal matters and 22% of their time on compliance.
To purchase the full survey, go to www.frandata.com.
Noble Roman's Wins Lawsuit Against Franchisees
On Dec. 23, 2010, the Superior Court in Hamilton County, IN, granted summary judgment in favor of franchisor Noble Roman's, Inc. against numerous groups of franchisees that sued it in 2008 (Kari Heyser, Fred Eric Heyser and Meck Enterprises, LLC, et al. v. Noble Roman's, Inc. et al.). Noble Roman's is the franchisor of Noble Roman's Pizza and Tuscano's Italian Style Subs, and it is traded over-the-counter under the symbol NROM.
Originally, 13 franchisees groups filed lawsuits against the franchisor and institutional lenders that provided funds to franchisees. The former franchisees alleged that Noble Roman's fraudulently induced them to purchase franchises for traditional locations through misrepresentations and omissions of material facts regarding the franchises. They sought compensatory damages of $5.1 million, as well as punitive damages. During the litigation, one group of franchisees voluntarily dismissed its claims, and the court held another group of franchisees in contempt and dismissed its claims with prejudice. Also, the court had previously dismissed the claims against the institutional lenders.
After winning summary judgment, Noble Roman's Chairman Paul Mobley issued a media statement indicating that Noble Roman's will continue with its counterclaims against the former franchisees for breach of contract. Those claims are for approximately $3.6 million, plus attorneys' fees, costs of collection, and punitive damages (in some cases).
Wyndham, Choice Hotel Franchisees File Two Class Actions
In December 2010, franchisees of Wyndham Worldwide, Inc. and Choice Hotels International filed class action lawsuits seeking an excess of $260 million in damages and $240 million in damages, respectively, against the hotel chains for violating franchise agreements and using unfair and deceptive practices. Specifically, the franchisees allege that the franchisors are charging an extra royalty fee of up to 5% of the room rate by tying guests' visits to the franchisors' guest-rewards programs, but neither the fee nor the details about which visits would qualify for the fee were sufficiently disclosed in franchise agreements. The lawsuits, Amar Shakti Enterprises, LLC, et al. v. Wyndham Worldwide, Inc., et al. and Jade Hospitality, LLC, et al. v. Choice Hotels International, Inc., et al., were filed in the U.S. District Court, Middle District of Florida.
Franchise contracts typically obligate franchisees to pay a “royalty” fee and a “reservation” or “system” fee. “However, on top of these fees, the hotel chains have charged and required plaintiffs and all other similarly situated franchisees to pay an additional fee of up to 5% of gross room sales generated from hotel stays by members of Wyndham Rewards [former Trip Rewards] and Choice Privileges,” said David Wood, shareholder, Ruden McClosky (Orlando, FL), which is representing the franchisees.
Franchisees are challenging the legitimacy of those loyalty club fees on several grounds, though the details vary depending on when a particular franchise contract was signed and with which hotel brand. According to the complaints, some franchise agreements “make no reference to qualifying stays by loyalty rewards members.” Other agreements allow the franchisors to increase the basic reservation fee for additional services, but do not “otherwise delineate what the services may be.”
In addition to challenging the validity of the fees, franchisees allege that franchisors inflated the number of guests whose visits qualify as loyalty club stays. Franchisor-required reservation software at every hotel “proactively matches” a guest with the rewards program even when the guest has not asked to accrue loyalty points. “Not only has a customer not affirmatively presented his loyalty program information, but he might not even know that he is a member,” said Wood, referencing another of the franchisees' complaints ' namely that many customers have been added to the loyalty programs without their knowledge because they were automatically enrolled when they made an online reservation. To not enroll would have required removing a check mark in a box at the bottom of the reservation ' that is, an opt-out from the program, rather than an opt-in. On that last point, Wood added that Wyndham and Choice might have recently changed the automatic opt-in system, after receiving franchisees' complaints.
Wyndham Worldwide currently franchises 13 brands, including Days Inn, Super 8, and Ramada, which comprise more than 7,090 hotels in the United States and nearly 70 countries and territories. A Wyndham representative said that the company does not comment about pending litigation.
Choice Hotels franchises more than 6,000 hotels in the United States and more than 35 countries worldwide, under brands such as Clarion Inn, Comfort Inn, and Quality Inn. The company did not respond to a request for comment.
Franchise Compensation Survey 2011 Released
FRANData's “Franchise Compensation Report 2011,” released late last year, found that general counsel to franchise firms earned a median salary of $180,000, in-house attorneys earned a median salary of $101,000, and paralegals earned a median salary of $45,000.
Due to minimal overlap in franchise companies that responded to both the 2009 and 2010 surveys, FRANData aggregated the responses from those two years and it did not issue comparative figures that would show compensation trends. Given the weak economy, FRANData assumed that salaries did not increase from 2009 to 2010.
For purposes of comparison, in-house attorneys were grouped in a job function category with management-level employees of franchises, including human resources, compliance, field operations, marketing, and site selection. Attorneys' median salaries were about 30% above managers in each of those categories, though their full compensation was much closer to the average because other positions typically received larger bonuses and other forms of compensation.
The survey also revealed that in-house attorneys said they spend 78% of their time on legal matters and 22% of their time on compliance.
To purchase the full survey, go to www.frandata.com.
Noble Roman's Wins Lawsuit Against Franchisees
On Dec. 23, 2010, the Superior Court in Hamilton County, IN, granted summary judgment in favor of franchisor Noble Roman's, Inc. against numerous groups of franchisees that sued it in 2008 (Kari Heyser, Fred Eric Heyser and Meck Enterprises, LLC, et al. v. Noble Roman's, Inc. et al.). Noble Roman's is the franchisor of Noble Roman's Pizza and Tuscano's Italian Style Subs, and it is traded over-the-counter under the symbol NROM.
Originally, 13 franchisees groups filed lawsuits against the franchisor and institutional lenders that provided funds to franchisees. The former franchisees alleged that Noble Roman's fraudulently induced them to purchase franchises for traditional locations through misrepresentations and omissions of material facts regarding the franchises. They sought compensatory damages of $5.1 million, as well as punitive damages. During the litigation, one group of franchisees voluntarily dismissed its claims, and the court held another group of franchisees in contempt and dismissed its claims with prejudice. Also, the court had previously dismissed the claims against the institutional lenders.
After winning summary judgment, Noble Roman's Chairman Paul Mobley issued a media statement indicating that Noble Roman's will continue with its counterclaims against the former franchisees for breach of contract. Those claims are for approximately $3.6 million, plus attorneys' fees, costs of collection, and punitive damages (in some cases).
Wyndham, Choice Hotel Franchisees File Two Class Actions
In December 2010, franchisees of
Franchise contracts typically obligate franchisees to pay a “royalty” fee and a “reservation” or “system” fee. “However, on top of these fees, the hotel chains have charged and required plaintiffs and all other similarly situated franchisees to pay an additional fee of up to 5% of gross room sales generated from hotel stays by members of Wyndham Rewards [former Trip Rewards] and Choice Privileges,” said David Wood, shareholder,
Franchisees are challenging the legitimacy of those loyalty club fees on several grounds, though the details vary depending on when a particular franchise contract was signed and with which hotel brand. According to the complaints, some franchise agreements “make no reference to qualifying stays by loyalty rewards members.” Other agreements allow the franchisors to increase the basic reservation fee for additional services, but do not “otherwise delineate what the services may be.”
In addition to challenging the validity of the fees, franchisees allege that franchisors inflated the number of guests whose visits qualify as loyalty club stays. Franchisor-required reservation software at every hotel “proactively matches” a guest with the rewards program even when the guest has not asked to accrue loyalty points. “Not only has a customer not affirmatively presented his loyalty program information, but he might not even know that he is a member,” said Wood, referencing another of the franchisees' complaints ' namely that many customers have been added to the loyalty programs without their knowledge because they were automatically enrolled when they made an online reservation. To not enroll would have required removing a check mark in a box at the bottom of the reservation ' that is, an opt-out from the program, rather than an opt-in. On that last point, Wood added that Wyndham and Choice might have recently changed the automatic opt-in system, after receiving franchisees' complaints.
Choice Hotels franchises more than 6,000 hotels in the United States and more than 35 countries worldwide, under brands such as Clarion Inn, Comfort Inn, and Quality Inn. The company did not respond to a request for comment.
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.
The Stranger to the Deed Rule
In 1987, a unanimous Court of Appeals reaffirmed the vitality of the "stranger to the deed" rule, which holds that if a grantor executes a deed to a grantee purporting to create an easement in a third party, the easement is invalid. Daniello v. Wagner, decided by the Second Department on November 29th, makes it clear that not all grantors (or their lawyers) have received the Court of Appeals' message, suggesting that the rule needs re-examination.