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To Disclose or Not to Disclose?
Financial performance representations (“FPRs”), formerly referred to as “earnings claims,” have generated extensive discussion since franchise sales first became regulated in 1970. FPRs are, in plain English, projections of how a franchise might perform financially or historical financial performances. Most commentators on this subject note that such financial information is likely the first item a prospective franchisee will ask for in its discussions with a franchisor. However, federal and state government officials have steadfastly refused to make disclosure of this information mandatory. A franchisor has the right not to disclose any financial performance information in its negotiations with prospective franchisees. However, if a franchisor does elect to give this information to prospects, that information must be included in the franchise disclosure document (“FDD”) the franchisor is required to give to prospective franchisees, and cannot be false, misleading, or omit any information necessary to make it not misleading.
Around 1970, when franchise regulation was first developing in the United States, very few franchisors, perhaps only 10% to 20%, made any financial performance representations to their prospects. They declined to do so for various reasons: the rules were very strict as to what could be disclosed; franchisors did not always have access to the data necessary to create an FPR; franchisors feared suits from prospective franchisees; and, in some franchise systems, the FPR would not have shown prospects a hopeful picture. The rules governing FPRs have been simplified over the years, but, still, only around 40% of franchisors elect to create FPRs.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
Judge Rules Shaquille O'Neal Will Face Securities Lawsuit for Promotion, Sale of NFTs
A federal district court in Miami, FL, has ruled that former National Basketball Association star Shaquille O'Neal will have to face a lawsuit over his promotion of unregistered securities in the form of cryptocurrency tokens and that he was a "seller" of these unregistered securities.
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It
Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?
A Lawyer's System for Active Reading
Active reading comprises many daily tasks lawyers engage in, including highlighting, annotating, note taking, comparing and searching texts. It demands more than flipping or turning pages.
Blockchain Domains: New Developments for Brand Owners
Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.