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Franchise Compliance App Released
“Franchise Complier,” the first franchise-compliance software application (“app”) for mobile devices, has been released on iTunes, and it's rapidly being downloaded by professionals across the franchising industry. Developed by franchise lawyer Andrew A. Caffey, the app is a free iTunes download. It is available now solely for iPads, iPhone Touch, and iPhones, but Caffey said that Blackberry and Android applications are likely to follow.
“I've written about franchise regulations and given legal advice to franchisors for more than 30 years, and I constantly get the same types of questions from franchisors. I decided that it would be useful to have key information on an app so that it could be accessed quickly,” said Caffey.
As an example, a franchisor client might get its first lead on a prospective franchisee in Montana. The franchisor would need to know if it is legal to pursue the franchisee, or whether it must first register a state-specific disclosure document. Franchise Complier has a “wheel” in which all 50 states are listed. The franchisor could look at Montana (or any other state) and immediately find out three major facts: 1) Does it have a state-specific franchise investment law? 2) Does it have a franchise-relationship law? 3) Does it have a business opportunity law? The app also includes links to the state code.
Franchise Complier also includes definitions of key terms such as “financial performance representations” and “franchise seller,” and it has an extensive FAQs section that addresses the common questions that Caffey has seen in his decades in the business. “Obviously, this information is available elsewhere, but I've distilled it here for quick reference,” said Caffey.
For experienced franchise attorneys, Caffey said that the app can serve as an easy way to spot-check information that they probably remember, as well as a starting point for research. For non-attorneys in franchises or attorneys with less experience in franchise law, the app is a general reference tool.
Given that users will include franchisors and attorneys with minimal knowledge of franchising, as well as those attorneys more closely aligned with the franchise industry, Caffey said he felt pressure to both get it right and also to make clear the limitations of the information that is being provided. “I put it together more carefully than anything else I've ever done,” he said. “Also, I added notations in several places in the app that franchisors should contact counsel for more information. Especially on franchise relationship laws as they relate to terminations, I think franchisors need to work closely with their counsel. I'm not providing the answer to every question or the 'question beyond the question.'”
Writing the material for the app required Caffey to return to source materials for definitions and the like. Along the way, he said he learned or re-learned details about franchise law. For example, he was reminded of FTC regulations outside of the well-known Franchise Rule that directly affect franchisors. “I summarized six or seven specific activities that are prohibited by the FTC, such as seeding information with a few franchisees [who might be called by franchising prospects]. They're listed in the app,” he said.
Firehouse Subs Loses Trademark Judgment Appeal
A judge in the U.S. District Court for the District of South Carolina, Florence Division, upheld a jury trial's verdict in the same court that declared that a franchisor “fraudulently obtained” its trademarks, Firehouse Restaurant Group Inc. et al. v. Scurmont LLC et al., U.S. District Court (SC), Oct. 17, 2011. Sandwich chain Firehouse Subs filed a lawsuit in 2008 against Calli Baker's Firehouse Bar and Grill in Myrtle Beach, SC, arguing that the single restaurant violated Firehouse Subs' trademark. Instead, in August 2011, an eight-person jury found that the mark, which was granted by the U.S. Patent and Trademark Office in 2003 for use in the category of restaurants, was “fraudulently obtained,” and it ruled against all of the claims by the franchisor (see FBLA, October 2011). Firehouse Subs has 350 franchised restaurants across the United States.
Judge R. Bryan Harwell denied a motion by Firehouse Subs for a new jury trial. He found that Firehouse's owner, Robin Sorenson, was aware of Calli Baker's Firehouse Bar and Grill about six months prior to filing for a trademark and that evidence “suggests that the Firehouse Plaintiffs ' realized that there was a likelihood of confusion between the two restaurants.” He cited a letter sent by Sorenson to the owner of Calli Baker's, accompanied by a $5,000 check, as a goodwill gesture based on the planned opening of restaurants in the Tampa area with a similar name. Calli Baker's owner never signed the “coexistence agreement letter” or cashed the check.
Judge Harwell also declared that Firehouse made “false, material representation” in a letter to the U.S. Patent Office that contained a listing of 27 restaurants with the name “Firehouse” that lacked the inclusion of Calli Baker's Firehouse. Because the Patent Office approved the patent after receiving the list of the 27 restaurants, Firehouse Subs argued that it would have also approved the patent had it been told about Calli Baker's. The judge disagreed, noting that the letter does not indicate that any of the other named Firehouse restaurants possibly had a prior claim to the name.
The judge reduced the trial court's amount of reimbursement for legal fees for Calli Baker's attorneys approximately in half, to just over $250,000.
Firehouse Subs did not respond for comment.
Utah Franchisee Fights for Right to Open
A Utah Subway franchisee is fighting the city of Springdale for the right to open a restaurant in the town. Springdale Planning Commission and Springdale Town Council members cited a city ordinance, passed in 2006, that bans franchised and “formula” restaurants in refusing to let a group of investors, operating as Izzy Poco, open a Subway franchise. Referencing the franchise ordinance, the city's fire inspector refused to inspect the restaurant ' a necessary step for it to open ' after Izzy Poco purchased a Subway franchise in 2010, found a location in Springdale, received a license from the city to operate a sandwich shop, and passed a health inspection. Izzy Poco's investors maintain they have spent more than $500,000 purchasing the franchise, remodeling the site, and purchasing supplies.
The franchisee first filed a complaint with the U.S. District Court for the District of Utah in June 2010, suing both the town and individual members of the planning commission and town council. The latest ruling from the court, on Nov. 1, 2011, granted summary judgment in favor of the individuals named in the lawsuit, but kept alive litigation against the town of Springdale. Izzy Poco is seeking an injunction against the franchise ordinance (which would enable it to seek renewal of its license to operate) and damages exceeding $500,000.
In the lawsuit, Izzy Poco alleged that the town and officials were violating the Commerce Clause of the U.S. Constitution in preventing it from “engaging in interstate trade free from restrictive and discriminatory local regulations.” Specifically, it said that enforcement of the franchise ordinance was discriminatory because, unlike other cities with similar ordinances, Springdale did not consider any accommodations to allow the franchise if it conformed to codes designed to maintain the appearance and other features of the downtown area of Springdale. The lawsuit referenced restaurants in Springdale that have contractual arrangements with well-known brands Starbucks and Seattle's Best that result in product offerings and d'cor that could meet the town's definition of “formula restaurants” that would seemingly be banned by the city ordinance. Also, the lawsuit referenced two members of the town council who own and operate food and footwear franchises in the city.
Izzy Poco, a minority-owned business, also alleged that the town council engaged in a civil conspiracy. “The Defendants agreed among themselves to the unlawful and unconstitutional purpose of preventing a Subway franchise or any other food franchise from opening in the town and keeping outsiders, especially minorities, from operating a business in Springdale,” the lawsuit stated.
Springdale bills itself as the gateway to Zion National Park. One of the most popular and challenging routes in the park is an 8-mile hike through a “slot canyon” ironically known as “The Subway.”
Franchise Compliance App Released
“Franchise Complier,” the first franchise-compliance software application (“app”) for mobile devices, has been released on iTunes, and it's rapidly being downloaded by professionals across the franchising industry. Developed by franchise lawyer Andrew A. Caffey, the app is a free iTunes download. It is available now solely for iPads, iPhone Touch, and iPhones, but Caffey said that Blackberry and Android applications are likely to follow.
“I've written about franchise regulations and given legal advice to franchisors for more than 30 years, and I constantly get the same types of questions from franchisors. I decided that it would be useful to have key information on an app so that it could be accessed quickly,” said Caffey.
As an example, a franchisor client might get its first lead on a prospective franchisee in Montana. The franchisor would need to know if it is legal to pursue the franchisee, or whether it must first register a state-specific disclosure document. Franchise Complier has a “wheel” in which all 50 states are listed. The franchisor could look at Montana (or any other state) and immediately find out three major facts: 1) Does it have a state-specific franchise investment law? 2) Does it have a franchise-relationship law? 3) Does it have a business opportunity law? The app also includes links to the state code.
Franchise Complier also includes definitions of key terms such as “financial performance representations” and “franchise seller,” and it has an extensive FAQs section that addresses the common questions that Caffey has seen in his decades in the business. “Obviously, this information is available elsewhere, but I've distilled it here for quick reference,” said Caffey.
For experienced franchise attorneys, Caffey said that the app can serve as an easy way to spot-check information that they probably remember, as well as a starting point for research. For non-attorneys in franchises or attorneys with less experience in franchise law, the app is a general reference tool.
Given that users will include franchisors and attorneys with minimal knowledge of franchising, as well as those attorneys more closely aligned with the franchise industry, Caffey said he felt pressure to both get it right and also to make clear the limitations of the information that is being provided. “I put it together more carefully than anything else I've ever done,” he said. “Also, I added notations in several places in the app that franchisors should contact counsel for more information. Especially on franchise relationship laws as they relate to terminations, I think franchisors need to work closely with their counsel. I'm not providing the answer to every question or the 'question beyond the question.'”
Writing the material for the app required Caffey to return to source materials for definitions and the like. Along the way, he said he learned or re-learned details about franchise law. For example, he was reminded of FTC regulations outside of the well-known Franchise Rule that directly affect franchisors. “I summarized six or seven specific activities that are prohibited by the FTC, such as seeding information with a few franchisees [who might be called by franchising prospects]. They're listed in the app,” he said.
Firehouse Subs Loses Trademark Judgment Appeal
A judge in the U.S. District Court for the District of South Carolina, Florence Division, upheld a jury trial's verdict in the same court that declared that a franchisor “fraudulently obtained” its trademarks, Firehouse Restaurant Group Inc. et al. v. Scurmont LLC et al., U.S. District Court (SC), Oct. 17, 2011. Sandwich chain Firehouse Subs filed a lawsuit in 2008 against Calli Baker's Firehouse Bar and Grill in Myrtle Beach, SC, arguing that the single restaurant violated Firehouse Subs' trademark. Instead, in August 2011, an eight-person jury found that the mark, which was granted by the U.S. Patent and Trademark Office in 2003 for use in the category of restaurants, was “fraudulently obtained,” and it ruled against all of the claims by the franchisor (see FBLA, October 2011). Firehouse Subs has 350 franchised restaurants across the United States.
Judge R. Bryan Harwell denied a motion by Firehouse Subs for a new jury trial. He found that Firehouse's owner, Robin Sorenson, was aware of Calli Baker's Firehouse Bar and Grill about six months prior to filing for a trademark and that evidence “suggests that the Firehouse Plaintiffs ' realized that there was a likelihood of confusion between the two restaurants.” He cited a letter sent by Sorenson to the owner of Calli Baker's, accompanied by a $5,000 check, as a goodwill gesture based on the planned opening of restaurants in the Tampa area with a similar name. Calli Baker's owner never signed the “coexistence agreement letter” or cashed the check.
Judge Harwell also declared that Firehouse made “false, material representation” in a letter to the U.S. Patent Office that contained a listing of 27 restaurants with the name “Firehouse” that lacked the inclusion of Calli Baker's Firehouse. Because the Patent Office approved the patent after receiving the list of the 27 restaurants, Firehouse Subs argued that it would have also approved the patent had it been told about Calli Baker's. The judge disagreed, noting that the letter does not indicate that any of the other named Firehouse restaurants possibly had a prior claim to the name.
The judge reduced the trial court's amount of reimbursement for legal fees for Calli Baker's attorneys approximately in half, to just over $250,000.
Firehouse Subs did not respond for comment.
Utah Franchisee Fights for Right to Open
A Utah Subway franchisee is fighting the city of Springdale for the right to open a restaurant in the town. Springdale Planning Commission and Springdale Town Council members cited a city ordinance, passed in 2006, that bans franchised and “formula” restaurants in refusing to let a group of investors, operating as Izzy Poco, open a Subway franchise. Referencing the franchise ordinance, the city's fire inspector refused to inspect the restaurant ' a necessary step for it to open ' after Izzy Poco purchased a Subway franchise in 2010, found a location in Springdale, received a license from the city to operate a sandwich shop, and passed a health inspection. Izzy Poco's investors maintain they have spent more than $500,000 purchasing the franchise, remodeling the site, and purchasing supplies.
The franchisee first filed a complaint with the U.S. District Court for the District of Utah in June 2010, suing both the town and individual members of the planning commission and town council. The latest ruling from the court, on Nov. 1, 2011, granted summary judgment in favor of the individuals named in the lawsuit, but kept alive litigation against the town of Springdale. Izzy Poco is seeking an injunction against the franchise ordinance (which would enable it to seek renewal of its license to operate) and damages exceeding $500,000.
In the lawsuit, Izzy Poco alleged that the town and officials were violating the Commerce Clause of the U.S. Constitution in preventing it from “engaging in interstate trade free from restrictive and discriminatory local regulations.” Specifically, it said that enforcement of the franchise ordinance was discriminatory because, unlike other cities with similar ordinances, Springdale did not consider any accommodations to allow the franchise if it conformed to codes designed to maintain the appearance and other features of the downtown area of Springdale. The lawsuit referenced restaurants in Springdale that have contractual arrangements with well-known brands Starbucks and Seattle's Best that result in product offerings and d'cor that could meet the town's definition of “formula restaurants” that would seemingly be banned by the city ordinance. Also, the lawsuit referenced two members of the town council who own and operate food and footwear franchises in the city.
Izzy Poco, a minority-owned business, also alleged that the town council engaged in a civil conspiracy. “The Defendants agreed among themselves to the unlawful and unconstitutional purpose of preventing a Subway franchise or any other food franchise from opening in the town and keeping outsiders, especially minorities, from operating a business in Springdale,” the lawsuit stated.
Springdale bills itself as the gateway to Zion National Park. One of the most popular and challenging routes in the park is an 8-mile hike through a “slot canyon” ironically known as “The Subway.”
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.