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Exploring Alternatives to the Franchise Model
We have all run into a situation where an existing or potential client has outlined a deal management wants to do (or, in some cases, has already done), which meets the legal definition of a franchise, but the client is adamant about avoiding the real or perceived burdens of being deemed a franchisor. Establishing a franchise system may require, among other things, compliance with franchise sales laws, public disclosure of financial statements, observing contractual limitations imposed by franchise relationship laws, and enduring the public image of being a franchise. There are a variety of distribution models other than franchising available to clients for structuring envisioned expansion. However, if certain elements are involved in the proposed transaction, creation of a franchise system may become legally necessary. This article addresses the issues practitioners face in advising clients in these scenarios and explores some of the various alternatives to the franchise model and exemptions from franchise disclosure law that are available to your clients.
The 'Cupcakes' Hypothetical
For illustration, consider a hypothetical bakery concept, 'Cupcakes,' that has several very successful company-owned stores in a metropolitan area known as 'City.' Cupcakes wants to expand outside of City into surrounding suburban markets to further test the Cupcakes concept before it invests the money and resources necessary to create a franchise system. Cupcakes has several parties interested in the concept, but wants to avoid the franchise structure until profitable expansion into non-metropolitan markets has been proven. A significant obstacle Cupcakes faces, however, is that it does not want, or is not able, to front the necessary capital to expand into all of the markets it intends to test. Instead, Cupcakes wants to use other people's money to grow its operations.
Bonus Content: How Emerging Technologies Are Impacting IP: A Chat With Legalweek Speaker Ryan Phelan
A Q&A with conference speaker Ryan Phelan, a partner at Marshall, Gerstein & Borun and founder and moderator of legal blog PatentNext, to discuss how courts and jurisdictions are handling novel technologies, the copyrightability of AI-assisted art, and more.
Overview of Regulatory Guidance Governing the Use of AI Systems In the Workplace
Businesses have long embraced the use of computer technology in the workplace as a means of improving efficiency and productivity of their operations. In recent years, businesses have incorporated artificial intelligence and other automated and algorithmic technologies into their computer systems. This article provides an overview of the federal regulatory guidance and the state and local rules in place so far and suggests ways in which employers may wish to address these developments with policies and practices to reduce legal risk.
Is Google Search Dead? How AI Is Reshaping Search and SEO
This two-part article dives into the massive shifts AI is bringing to Google Search and SEO and why traditional searches are no longer part of the solution for marketers. It’s not theoretical, it’s happening, and firms that adapt will come out ahead.
While Federal Legislation Flounders, State Privacy Laws for Children and Teens Gain Momentum
For decades, the Children’s Online Privacy Protection Act has been the only law to expressly address privacy for minors’ information other than student data. In the absence of more robust federal requirements, states are stepping in to regulate not only the processing of all minors’ data, but also online platforms used by teens and children.
Revolutionizing Workplace Design: A Perspective from Gray Reed
In an era where the workplace is constantly evolving, law firms face unique challenges and opportunities in facilities management, real estate, and design. Across the industry, firms are reevaluating their office spaces to adapt to hybrid work models, prioritize collaboration, and enhance employee experience. Trends such as flexible seating, technology-driven planning, and the creation of multifunctional spaces are shaping the future of law firm offices.