Structuring Licensing Agreements to Avoid Inadvertent Franchise Creation
Crafting Contracts to Prevent FTC Fines, Liability and Significant Costs for Misclassification
Recording of a 90-minute CLE teleconference with Q&A
Conducted on Wednesday, January 7, 2009
Recorded event now available
This seminar will discuss the pitfalls of inadverent franchise creation and provide practical and experienced perspectives on drafting licensing agreements to prevent the business from being re-classified as a franchise.
Description
Setting up one of the two most common business expansion models, licensing, requires a thorough knowledge of franchise arrangements as well. Why? A poorly crafted licensing agreement can result in the inadvertent creation of a “hidden" franchise.
Franchising requires substantial disclosure documentation, while licensing is a lower cost, less regulated alternative. Misclassifying the business relationship as a license if it is actually a franchise is a common and costly, but avoidable, mistake.
Fines and penalties for noncompliance with franchise laws are steep and the monetary liability can be very damaging. The unintended franchise will also incur the expense of immediately complying with the franchise disclosure requirements or adjusting its operations to avoid franchise laws.
Listen as our authoritative panel provides practical and experienced perspectives on drafting licensing agreements to prevent the business from being classified as a franchise. The panel will discuss the legal definitions of a franchises and licensing, franchise disclosure documentation requirements, and the business opportunity laws that may apply to nonfranchises.
Outline
- Compliance with Federal and State Franchise Laws
- FTC franchise regulations and amended Franchise Rule
- State franchise laws
- Franchise Disclosure Document (FDD) under FTC and state laws
- Consequences of noncompliance with franchise laws
- FTC and state enforcement mechanisms, fines and remedies
- Cost of “after the fact” compliance with franchise laws
- Potential attorney malpractice
- Definition of Franchise under FTC Rule
- Three prong analysis
- Variance with state law definitions
- Crafting License/Distribution Agreements to Avoid Franchise Laws
- Trademark use
- Control over licensee
- Franchise fee
Benefits
The panel reviewed these and other key questions:
- What are the legal definitions of a license vs. a franchise -- and what factors are determinative in classifying a business arrangement as one or the other?
- What other business opportunity laws regulate businesses that do not fall within the franchise laws?
- What should practitioners avoid when drafting license agreements and structuring nonfranchise business deals so as to avoid the "hidden" or "illegal" franchise trap?
- What are the disclosure documentation requirements of federal and state franchise laws and the liability for noncompliance with these laws?
Faculty
Rochelle Spandorf,
Partner
Davis Wright Tremaine, Los Angeles
She is a nationally recognized franchise and distribution attorney with 30 years experience representing franchisors, manufacturers, licensors and franchisees in expansion and strategic development.
Phillip Leslie Wharton,
Partner
Epstein Becker Green, Atlanta
He is a nationally recognized franchise attorney who has held leadership roles in national franchise and staffing organizations. Additionally, he focuses on M&A's and staffing industry law. He is a frequent speaker on franchise-related topics, testified before a Congressional Subcommittee on the FTC Franchise Rule, and has chaired subcommittees of the International Franchise Association.
Craig R. Tractenberg,
Partner
Nixon Peabody, New York
He is a member of the firm's business litigation and bankruptcy teams. His representative matters include acquisitions and dispositions of franchise systems and restaurants, franchise encroachment, and termination and non-renewal litigation.
Ordering
Online CLE - Audio Recording
Includes audio streaming of full program plus handouts (available 24 hours after live seminar).
CLE:
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(*Indicates that Strafford must report attendance.)
Online CLE Audio $149.00
Available 24 hours after the live event
Recorded Event
Includes full event recording plus handouts (available after live seminar).
CLE: Pre-approved for self-study credit in: AK, AZ, CA, CT, HI, MO, MT, NY, TX*, VT, WA, WV. Upon request, self-study credit is also available in: CO, FL, GA, ID, KY, ME, ND, NE, NH, NM, NV, OR, UT, WI, WY. If you are applying for self-study credit in one of these states, contact Strafford CLE at 1-800-926-7926 ext. 35 or CLE@straffordpub.com. (*Indicates that Strafford needs to process the CLE — see below to purchase this option.)
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Available ten business days after the live event
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Customer Reviews
The program was very informative and the information was precise and straight forward.
Michael Bradford
Speidel Law Firm
The teleconference contained information that was relevant, useful and up-to-date.
Mark Hegedus
Spiegel & McDiarmid
The presentation was not too long, but included a great deal of information. The speakers kept to their times and provided an opportunity for questions at the end.
Amy E. McShane
Phillips Lytle LLP
The presenter was very articulate and had an excellent command of the topic and provided very thorough handouts.
Theresa Woodruff
Mercury Marine
High quality content, good speakers, and convenient to do over the web.
Ed Moomjian
Udall Law Firm
Business Contracts and Franchise Advisory Board
Partner
Bowman and Brooke
Partner
Davis Wright Tremaine
Partner
Nixon Peabody
Partner
Epstein Becker Green
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