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By Dawn Johnson on May 19, 2021 at 9:10 AM

With the COVID-19 pandemic affecting the performance of many businesses in 2020, franchisors are faced with a whole new set of considerations when preparing their 2021 franchise disclosure documents, including whether to include financial performance representations from 2020.

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By Dawn Johnson, Beata Krakus, Susan Meyer, Abby Risner, Leonard Vines on March 10, 2021 at 9:45 AM
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By Daniel Garner, Kiran Jeevanjee on July 16, 2020 at 5:00 PM

Greensfelder summer associate Kiran Jeevanjee contributed to this blog post.

Native American tribes occupy a unique position within the American legal system, and understanding these issues is vital for any franchisor considering a tribe as a potential franchisee. Federally recognized Native American tribes are classified as “domestic dependent nations” — meaning that the tribes are considered “distinct independent political communities” and can govern their own internal affairs. The most important consequence of this classification from a business perspective is that such tribes are entitled to tribal sovereign immunity that protects them from any civil suits or criminal prosecutions to which they did not consent.

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By Leonard Vines on June 23, 2020 at 11:00 AM

Although the full impact of COVID-19 remains unknown, many franchisors are looking to the future and new opportunities for franchise sales. Some franchises may be dramatically affected, either temporarily or permanently, and may have to significantly alter their business model to remain profitable. Others might actually benefit from the pandemic.

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By Beata Krakus on June 8, 2020 at 11:00 AM

As required every four years, adjustments to the FTC Franchise Rule’s monetary thresholds for certain exemptions are on the way.

The exemptions under the FTC Franchise Rule are intended to exclude franchise transactions in which the prospective franchisee doesn’t need the protection the rule is intended to provide. As several exemptions available under the FTC Franchise Rule are tied to dollar thresholds, they need to be adjusted from time to time to remain relevant. For example, when the current rule was adopted in 2007, a franchise sale was exempt from the FTC Franchise Rule’s disclosure requirements if the payments from the franchisee to the franchisor in the first six months of the franchisee’s operations did not exceed $500. Adjustment of the dollar threshold is necessary for this exemption not to become irrelevant with inflation. 

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By Beata Krakus on March 27, 2020 at 1:50 PM

US mapThis post was updated on April 8, 2020.

In recent days, several U.S. states have announced accommodations for franchise filings.

California announced an extension of time for calendar year franchisors to file their  2020 renewals from April 20 to June 20 in light of the COVID-19 pandemic. Although the renewal filing fee of $475 remains in effect if the renewal is filed by June 20, those who do not file  by April 20 must suspend sales until approved. Filers are urged to file electronically and can sign their application forms using an e-sign software program, such as DocuSign, instead of getting their signatures notarized.  Those who file by hard copy are asked to waive the automatic effectiveness, and their filing will not be effective until the actual date designated by order.

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By Franchising & Distribution Industry Group on March 27, 2020 at 2:00 PM

A new publication from Greensfelder’s Business Services practice group regarding Economic Injury Disaster Loans (EIDL) may be relevant to many franchise systems.  The purpose of the EIDL program is to provide economic support to small businesses in order to continue operations during the COVID-19 pandemic. The procedure and terms of the EIDLs are determined on a case-by-case basis, but the article linked below provides  a high-level summary of the programs, eligibility criteria and application process.

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By Beata Krakus on March 19, 2020 at 4:15 PM

Calendar flipping pagesOn March 18, 2020, the State Corporation Commission of Virginia extended current franchise registrations and exemptions under the Virginia Retail Franchising Act that would have expired between March 16, 2020, and April 6, 2020, by 21 days. The order indicates that if the COVID-19 emergency continues, one or more additional extensions may be granted by order.

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By Beata Krakus on March 18, 2020 at 9:30 AM

Hourglass timer being refilledMarch and April mean franchise registration renewal season for franchisors. Updating the franchise disclosure document (FDD) in a timely fashion is often a major challenge. COVID-19 has thrown much of the world, including franchisors, into a new, very uncertain reality. People and businesses are scrambling to respond and adapt. Yet, March and April remain the annual franchise registration renewal season with deadlines set by statute.

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By Lauren Harris on April 4, 2019 at 9:20 AM

Three links of a chain, with the middle one being blue and the left and right one being silverOn April 1, 2019, the U.S. Department of Labor (DOL) offered a simplified test in a Notice of Proposed Rulemaking to determine whether two entities should be considered joint employers under the Fair Labor Standards Act (FLSA). The FLSA provides that two entities can be jointly and severally responsible for an employee’s wages, and thus the potential FLSA violations of either entity, if they function as joint employers. The notice sets out that the employment relationship should be determined based on a balance of four factors, specifically, whether a potential joint employer actually exercises the power to:

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