Barry Kurtz dark logoFranchise First and Foremost
June 2011
 

21650 Oxnard Street

Suite 500
Woodland Hills, CA 91367
818-827-9229

CLIENT IN THE NEWS

 

Total Golf Adventures continues to get well-deserved attention from the golf industry press. On-line service Southland Golf  highlights CEO and President Josh Jacobs, COO and National Program Director, Steve Tanner, and their company in its June 2011 posting. TGA programs are now in 300 Southern California schools, parks and recreation programs and more than 20 Southern California golf courses, providing a variety of classes, camps and clinics throughout the year. For the entire article, [click here.]

 FRANCHISOR 101:  ARE WE GOING TO LOSE OUR COOKIES? 

 

In a recent decision by the Seventh Circuit Court of Appeals in Girl Scouts of Manitou Council, Inc. v. Girl Scouts of the United States of America, Inc., the Court found that the Wisconsin Fair Dealership Act (WFDL) was violated when the Girl Scouts of the United States of America, Inc. (GSUSA) took unilateral action to dissolve its Manitou, Wisconsin chapter and replace it with 3 chapters with smaller territories without Manitou's consent and "without good cause".

The Court found that GSUSA grants "charters" (licenses) to local chapters which authorize them to use the "Girl Scout" trademark, which GSUSA owns, to conduct its business, sell cookies and other merchandise, solicit and accept charitable donations and operate Girl Scout camps. The local chapters must pay the national organization the membership fees collected from each Girl Scout in each chapter.

GSUSA argued, among other things, that the WFDL did not apply to nonprofit organizations. The Court rejected this claim and stated:

"[W]e decline to read an exception for nonprofit enterprises into the Wisconsin law. Indeed, the statement...that the dealership law "was meant to protect only those small businessmen who make a substantial financial investment in inventory, physical facilities or 'good will' as part of their association with the grantor of the dealership" could have been written with the Manitou Council in mind. It manages a rolling inventory of Girl Scout-branded cookies, operates camps that are identified as "Girl Scout camps," and proselytizes for Girl Scouting in the communities that it serves, building up good will both for the local council and the national brand."
 

The Court concluded that GSUSA "relates to the councils [chapters] as franchisor to franchisee" and that "[f]rom a commercial standpoint the Girl Scouts are not readily distinguishable from Dunkin' Donuts."

Among other significant issues, Manitou raises the question of whether the Federal Trade Commission Rule on franchise disclosure and state laws governing pre-sale disclosure and registration would apply to nonprofit organizations with similar structures if the Manitou holding was adopted in other states. Legal counsel for exempt organizations should review the structure of their non-profit clients with experienced franchise counsel in light of this decision. For the full Manitou decision, [click here.]


FRANCHISEE 101: NICE TRY 

 

A franchisee's claims against his franchisor under the Washington Franchise Investment Protection Act [WFIPA], based upon alleged misrepresentations by the franchisor of the franchisee's earning potential, were recently rejected by a New York Court because the franchisee could not show that he actually relied on the alleged earnings claim or that his reliance was reasonable. Included in the action was a claim by the franchisee that the franchisor violated the WFIPA by approving a sales forecast developed by the franchisee on his own. The Court found that the franchisor's approval of the franchisee's sales projections was nothing more than the franchisor's acceptance of the franchisee's numbers which was not covered by the WFIPA.

WE'VE MOVED!

 

Our new address and telephone numbers are:

 

21650 Oxnard Street, Suite 500

Woodland Hills, CA  91367

Telephone:  818-827-9229

Fax:  818-986-4474

 

We have become of counsel to Ezra Brutkus Gubner LLP [www.ebg-law.com], a 20+ attorney firm whose areas of practice include intellectual property and licensing, employment law, apparel industry law, banking and finance, bankruptcy and insolvency, commercial litigation and dispute resolution, real estate law and the representation of trustees in bankruptcy and receivers. We will act as franchise counsel for the firm and its clients and the firm will provide our clients with services in its areas of expertise.

 

This communication published by Barry Kurtz, APC is intended as general information and may not be relied upon as legal advice, which can only be given by a lawyer based upon all the relevant facts and circumstances of a particular situation.

Copyright Barry Kurtz, A Professional Corporation 2010 
All Rights Reserved.

 
In This Issue
Client in the News - Total Golf Adventures
Franchisor 101: Are We Going To Lose Our Cookies?
Franchisee 101: Nice Try
We've Moved!
Contributing Expert - Aaron Weiner

Contributing Expert

 

Aaron Weiner
Weiner Property Services, Inc.

 

Successful Real Estate Deals Address Much More Than Rent

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Barry Kurtz
Barry Kurtz is a prolific writer on the subject of franchise law. From due diligence to franchise appraisal, his articles are a valuable resource to any franchisee and franchisor.  He has been named a Certified Specialist in Franchise and Distribution Law by the State Bar of California Board of Legal Specialization.



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21650 Oxnard Street, Suite 500
Woodland Hills, CA 91367
818-827-9229
www.barrykurtzpc.com
bkurtz@barrykurtzpc.com