Countdown Begins for the Revised FTC Franchise Rule and UFOC
September 22, 2004
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
September 10, 2004
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
September 09, 2004
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
September 09, 2004
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
September 09, 2004
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.
In The Marketplace
September 09, 2004
Highlights of the latest equipment leasing news from around the country.
The Leasing Hotline
September 03, 2004
Highlights of the latest commercial leasing cases from around the country.
Proposed Revisions to the ADA's Physical Accessibility Guidelines Released
September 03, 2004
On July 23, 2004, the long-awaited proposed revisions to the Americans With Disabilities Act's (ADA) physical accessibility guidelines, the "ADAAG," were published in the Federal Register. Though the changes will take effect on Sept. 21, 2004, they will not be enforceable until adopted in their final form by the U.S. Department of Justice (DOJ). Since the proposed ADAAG have been completely reformatted to conform more closely to existing uniform accessibility standards and certain uniform building codes, it will be necessary to compare the current and proposed ADAAG specifications to understand the full scope of the changes. The proposed guidelines involve more than 230 pages of text and commentary, and it is not yet known what impact these changes will have on construction activities or how these guidelines will force landlords to modify existing leases to shift some of the responsibility of these new guidelines to tenants.
Abandoned and Unused Cables: A Hidden Liability Under the 2002 National Electric Code
September 03, 2004
In an effort to minimize the release of toxic gasses from cables in the event of fire, the 2002 version of the National Electric Code ("NEC"), promulgated by the National Fire Protection Association, sets forth new guidelines requiring that abandoned cables must be removed from buildings unless they are located in metal raceways or tagged "For Future Use." While the NEC is not, in itself, binding law, most jurisdictions in the United States adopt the NEC by reference in their state or local building and fire codes. Thus, noncompliance with the recent NEC guidelines will likely mean that a building is in violation of a building or fire code. If so, the building owner may also be in breach of agreements with tenants and lenders and may be jeopardizing its fire insurance coverage. Even in jurisdictions where the 2002 NEC has not been adopted, it may be argued that the guidelines represent the standard of reasonable care and could result in tort liability for the landlord if toxic gasses from abandoned cables are emitted in a fire. With these potential liabilities in mind, this article discusses: 1) how to address the abandoned wires and cables currently located within the risers, ceilings and other areas of properties, and 2) additional considerations in the placement and removal of telecommunications cables going forward.
