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Structuring a Refranchising Program
As used in this article, “refranchising” means the sale of company-operated units to purchasers who become franchisees operating the units as franchise stores. Frequently the franchisees will also purchase the right/obligation to develop additional stores pursuant to a development agreement, thus increasing the upfront revenue to the seller or franchisor and providing for the construction of new units at the expense of the new franchisee. The sale may also involve the obligation of the purchaser to remodel the purchased units, once again allowing the seller or franchisor to achieve an overall upgrading of its units using the cash of the buyer, rather than its own resources. Ideally, the royalty revenue from the newly franchised units will replace the cash flow and profits lost from ceasing to operate the units as company stores, while the purchaser's or franchisee's new development will ultimately increase revenues. Sales proceeds and exclusive territory fees and development fees received at closing can be used to increase current earnings, reduce debt, and free up lines of credit for additional company store development in other markets.
There are several things that a franchisor can do in structuring its refranchising program to reduce the likelihood of disputes and litigation. This article discusses the presale market identification and internal due diligence and initial marketing process that culminates in the execution of a letter of intent (“LOI”).
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.
CLE Shouldn't Be the Only Mandatory Training for Attorneys
Each stage of an attorney's career offers opportunities for a curriculum that addresses both the individual's and the firm's need to drive success.
Discovery of Claim Construction and Infringement Analysis May be Compelled Prior to a Markman Hearing
A defendant in a patent infringement suit may, during discovery and prior to a <i>Markman</i> hearing, compel the plaintiff to produce claim charts, claim constructions, and element-by-element infringement analyses.