California Lawyers Association

Business Law Franchise Law Committee

Updates from the BLS Franchise Law Committee

The North American Securities Administrators Association, Inc. (“NASAA”) is seeking public comment on a proposed NASAA Statement of Policy Regarding the Use of Franchise Questionnaires and Acknowledgments. Read more
The District Court largely adopted the Magistrate’s Report and Recommendation concerning cross-motions for summary judgment in which the Magistrate denied franchisee plaintiffs’ motions in their entirety and denied in part and granted in part franchisor defendants’ motions. Read more
The District Court denied in part and granted in part cross-motions for summary judgment. Read more
The Business Law Section is compiling the complete Interpretive Opinions concerning franchise issues from the State of California Department of Corporations. For past Franchise Opinion reports, click here or contact the Business Law Section. Read more
The Franchise Law Committee presents the following case update. In 2018, the California Supreme Court issued a landmark decision in the matter of Dynamex Operations West, Inc. v. Superior Court of Los Angeles. The court rejected a previous test for determining whether workers should be classified as either employees or independent contractors. Read more
In light of the COVID-19 pandemic, several states that require annual Franchise Disclosure Document (FDD) renewals made recent changes to their filing deadlines, fees and/or submission requirements. Read more
The members of the BLS Franchise Law Committee ("FLC") specialize in franchising, licensing and distribution law. The FLC is extremely diverse, with its members representing both franchisees, franchisors and distributors in both disputes and deals. The FLC advises California practitioners about the multiple laws and regulations that govern franchises throughout California and sometimes in other states. On December 12, 2019, the Franchise Committee held a webinar on Assembly Bill 5 (classification of workers as independent contractors or employees) with a… Read more
Assembly Bill 5 (Worker Status: employees and independent contractors) (“AB 5”) is the proposed codification of the ABC Test for the California Labor Code and California Unemployment Insurance Code based on the California Supreme Court decision of Dynamex Operations West, Inc. v. Superior Court of Los Angeles, 4 Cal.5th 903 (2018). AB 5 replaces the current common law analysis under S. G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal.3d 341 (1989), for determining the status of a worker as either an employee or independent contractor. Read more
On February 13th, the Federal Trade Commission (the “FTC”) announced that it is seeking public comment on its Trade Regulation Rule entitled, "Disclosure Requirements and Prohibitions Concerning Franchising" (the “Rule”). As part of the FTC’s periodic regulatory review, the agency is requesting comments to thirteen specific questions to address whether franchisors, franchise sellers and franchisees have benefited from the Rule, what modifications are needed to the Rule, the costs of compliance and what amendments might be needed to address changes in relevant technology and economic conditions. Read more
A district court sitting in California was recently asked to address the enforceability of an out-of-state forum selection clause in a franchise agreement in light of the U.S. Supreme Court’s landmark decision in Atlantic Marine Constr. Co., Inc. v. United States Dist. Court for W. Dist. of Texas, 134 S. Ct. 568 (2013). As discussed below, the district court circumvented Atlantic Marine by finding that the California Franchise Relations Act (the “CFRA’), at Bus. & Prof. Code § 20040.5, renders the out-of-state forum selection… Read more

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