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Should You Make an Earnings Claim?
If there is one question in the minds and on the lips of potential franchisees, it is “How much money can I make with this concept?” Franchisors may answer this question, of course, but with great care and consideration as to what, how, and when they answer it.
Under both the UFOC guidelines and the FTC Rule, a franchisor is not required to make any representations concerning the actual, average, projected, or forecasted sales, profits, or earnings likely to be realized by operation of the franchise. If a franchisor does make such representations, it must do so in strict compliance with the “earnings claim” requirements of the FTC Rule or Item 19 of the UFOC Guidelines. In short, an “earnings claim” is any information given at the direction of the franchisor to a prospective franchisee from which a specific level or range of actual or potential sales, costs, income, or profit from franchised or non-franchised units may easily be ascertained. Currently, approximately only 25% of franchisors make earnings claims, but this is not uniform across all types of franchisors. Some industries have substantially greater earnings claims rates.
The FTC Rule prohibits earnings representations about the actual or potential sales, income, or profits of existing or prospective franchisees unless: 1) reasonable proof exists to support the accuracy of the claim; 2) the franchisor has in its possession, at the time the claim is made, information sufficient to substantiate the accuracy of the claim; 3) the claim is geographically relevant to the prospective franchisee's proposed location; and 4) an earnings claim disclosure document is given to the prospective franchisee at the same time that the other disclosures are given.
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 Anti-Assignment Override Provisions
UCC Sections 9406(d) and 9408(a) are one of the most powerful, yet least understood, sections of the Uniform Commercial Code. On their face, they appear to override anti-assignment provisions in agreements that would limit the grant of a security interest. But do these sections really work?