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Exemptions and Prohibitions in the New Franchise Rule
The New Franchise Rule deletes the four exclusions in the existing Rule for employer-employees and general partnerships, cooperative organizations, testing or certification services, and single trademark licenses, since a revised definition of 'franchise' in the Rule obviates the need for these exclusions. The New Rule retains the exemption for franchise sales under $500, fractional franchises, and leased departments, while adding an exemption for petroleum marketers governed by the Petroleum Marketing Practices Act, as well as for three categories of 'sophisticated investor.'
The 'sophisticated investor' exemptions eliminate disclosure obligations to persons who can, it is assumed, take care of themselves without government assistance. The first exemption applies to a franchise where a large investment is required. Exempt are transactions in which the prospective franchisee makes an initial investment of at least $1 million, excluding the cost of unimproved land and funds provided by the franchisor or its affiliates. The total initial investment in a multi-unit franchise is used in determining the required amount. The franchisee must sign
an acknowledgment certifying the investment will exceed $1 million and that the franchisee is aware of the Rule and knows that making an investment in that amount and signing the acknowledgment exempts the transaction from the Rule. If a franchisee-entity has more than one investor, the exemption will apply only if at least one individual invests more than $1 million in the project. A group of investors contributing less than $1 million each does not satisfy the exemption's requirements. If a conversion franchise is involved, the initial investment in the unit or units being converted can satisfy the $1 million threshold. For a franchise transfer, the amount of the sale is used to determine the investment for purposes of the exemption.
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On Aug. 9, 2023, Gov. Kathy Hochul introduced New York's inaugural comprehensive cybersecurity strategy. In sum, the plan aims to update government networks, bolster county-level digital defenses, and regulate critical infrastructure.
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How AI Has Affected PR
When we consider how the use of AI affects legal PR and communications, we have to look at it as an industrywide global phenomenon. A recent online conference provided an overview of the latest AI trends in public relations, and specifically, the impact of AI on communications. Here are some of the key points and takeaways from several of the speakers, who provided current best practices, tips, concerns and case studies.
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.