Recent Developments in Accessibility to Movie Theaters
For the past 4 years, the subject of accessibility to movie theaters, primarily wheelchair access and captioning for the deaf and hard of hearing, has been the basis of much litigation in the federal courts. For wheelchair-bound patrons, the increasing number of theaters employing stadium-style seating spurred them to the courthouse while for the hearing impaired, it was the development of new technologies that gave impetus to their efforts. Although the plaintiffs have not always been successful, these lawsuits, as well as new Accessibility Guidelines for Buildings and Facilities issued under the Americans with Disabilities Act ("ADA"), are forcing theater owners to make changes to existing theaters and plan new theaters in different ways. (<i>See</i> related article, Proposed Revisions to the ADA's Physical Accessibility Guidelines Released, Sept. 2004 <i>CLLS</i>.)
Buying Into Or Offering Franchising Opportunities?
Franchise statutes and regulations apply to the Internet. Court decisions clearly state that suppliers who use the Internet to sell goods and services ' with independent distributors, dealers, or sales agents helping ' may be franchisors under federal or state law.
Franchise Law Applies To Internet
Traditional franchising is an established business technique that brings together the owner of a branded product with another. A franchisor provides a trademark or trade name and a business arrangement; a franchisee pays a royalty and often an initial fee for the right to do business under the franchisor's name and system. The contract binding the two parties is the franchise. <br>After the downturn in the Internet advertising market, Internet merchants developed the pay-for-performance e-commerce sector. Internet merchants paid a commission to affiliates who directed people to their Web sites. More sophisticated affiliate programs were set up as revenue sharing arrangements. The terms and conditions for these programs began to mimic franchise agreements.
Bankruptcy Behind Closed Doors
There has been a perceptible increase in the number of bankruptcy transactions taking place with the underlying arrangements being placed under seal. In other instances, the debtor indicates in its motion seeking approval of the transaction that it will not be providing the underlying agreement on which the transaction is based except to the major parties in the case (typically the judge, the creditors' committee, the DIP lenders and the United States Trustee). The burden then shifts to parties in interest to seek to obtain the information if they desire to review it. Part One of a Two-Part Article.
Countdown Begins for the Revised FTC Franchise Rule and UFOC
On Aug. 25, 2004, the Federal Trade Commission (FTC) released its long-anticipated report on its proposed changes to the FTC Rule on Franchising and Business Opportunity Ventures (FTC Rule). When the new FTC Rule comes into effect, franchisors will have to make significant changes to their existing disclosure documents and follow new rules for how and when they are delivered to prospective franchisees. There are also new exemptions for large transactions and large franchisees, and the FTC Rule will not apply to international franchise locations.
Franchisees Unite to Purchase Franchisor
Sixty franchisees forced The Ground Round restaurant chain to file bankruptcy on Feb. 19, 2004. The same franchisees, 4 months later, became their own franchisor. They bought the franchise assets out of bankruptcy, including all the franchise agreements, the development agreements, 42 trademarks, and 38 prime leases which they assigned to the subtenants. The franchisees formed a for-profit cooperative, reduced their own franchise royalties, and obtained traditional bank financing. They achieved their goal by maintaining a united front, developing a unique governance structure, and maintaining a vision for operating profitably unlike anyone else in the casual-dining restaurant sector.
Managing IP Value at Risk
According to a recent academic overview, American patent holders pay their lawyers $5 billion per year for patent prosecution services and approximately another $2.4 billion for patent litigation (not counting payments of settlements or damages). Besides being good news for the patent bar, this level of investment in patent creation and protection suggests that patents are valuable.
Dangers of Waiver-of-Defense Clauses in Leases
A lessee entering into a new lease agreement must be mindful of a waiver-of-defense clause. If a lease agreement contains a waiver-of-defense clause and the lease is later sold or assigned, the purchaser or assignee, if it is a holder in due course, will take the lease free and clear of numerous defenses (including a fraud in the inducement defense) otherwise available to the lessee had the lease not been sold or assigned.
Come 'Hell or High Water,' the Lessee Must Pay: Federal Court Upholds Defense Waiver
Come hell or high water" has been a motto of movie tough guys since the genre was invented. But as melodramatic as it may sound, it also has application in the world of business as well. Specific to the leasing industry, the phrase connotes a clause or condition of a leasing agreement that mandates the payment of all rent, fees, and costs to the lessor by the lessee, regardless of any intervening circumstances. Put succinctly, a lessee executing a deal with a "hell or high water clause" waives all of its defenses and is indefeasibly bound to pay its due to the lessor.
