Barry Kurtz dark logoFranchise First and Foremost
March 2012 

bkurtz@barrykurtzpc.com

clee@barrykurtzpc.com

bclements@barrykurtzpc.com

BRYAN CLEMENTS JOINS THE FIRM

 

Senior associate, Candice Lee, and I are pleased to announce that Bryan Clements joined our firm in January 2012. Bryan earned his J.D. from Southwestern Law School, where he graduated cum laude from its prestigious two-year SCALE program. While in law school, Bryan served as a judicial extern for the Honorable Otis D. Wright II, United States District Court Judge for the Central District of California, and for the Honorable Robert N. Kwan, United States Bankruptcy Court Judge for the Central District of California.

 

Bryan brings a wide range of practical experience to the firm in business transactions, mergers and acquisitions, securities and general corporate matters. In addition, Bryan has worked as the Interim Chief Financial Officer for a small business in the San Fernando Valley, and, prior to attending law school, managed his own business, which provided production sound related services to the entertainment industry. Bryan's knowledge and experience will help the firm better serve its franchise clients in franchise-related and transactional matters. You can reach Bryan at bclements@barrykurtzpc.com.

BARRY KURTZ FEATURED IN PREMIER ISSUE OF NEW ONLINE MAGAZINE 

 

Barry's article, "The Leap of Faith: Buying a Franchisor" was one of five articles selected for the premier issue of the online magazine, Southern California Professional. The magazine is published by Newman Grace Inc. and targets professionals, business owners, their clients and customers. Visit www.socalprofessional.com to review this beautiful and masterful online magazine.

FRANCHISOR 101:  NY's FRANCHISE LAW HAS A LONG REACH

 

A Love of Food I, LLC v. Maoz Vegetarian USA, Inc., recently decided by the District Court for the Southern District of Maryland, is a stark reminder why franchisors must understand how several states can regulate their franchise sales.

 

The New York Franchise Sales Act (NYFSA) not only requires franchisors headquartered in New York to register their Franchise Disclosure Document (FDD), but also mandates registration for franchisors headquartered elsewhere who originate a franchise offer from New York.

 

In Love of Food, a Delaware franchisor headquartered in New York sold a franchise for a site in Washington, D.C. to a Delaware franchisee who was based in Maryland. The franchisor argued that the NYFSA did not apply because it was domiciled in Delaware, not New York. The court found that the NYFSA applied because the franchisor sent its FDD from New York.

 

Franchisors must always be mindful that several state laws may apply to franchise sales. While most states only protect their residents and out-of-state owners of in-state franchised businesses, Love of Food's painful lesson was that New York is different. To see the full case, click here.

FRANCHISEE 101:  I SAID WHAT I MEANT AND I MEANT WHAT I SAID, I THINK

 

It's tough for franchisees to avoid arbitration. However, in Saleemi v. Gosh Enterprises, Inc., the Ninth Circuit Court of Appeals gave franchisees some hope if their franchisor terminates their franchise agreement with an inexact termination notice.

 

In Saleemi, the franchisor sent the franchisee an email stating that the franchise agreement was "fully terminated . . . [and] no contractual obligations exist anymore". The franchisee, hoping for his day in court, argued that the arbitration provision died with the rest of the contract.The franchisor argued otherwise, claiming that the email did not apply to the arbitration provision, which, it said, survived the email. The District Court agreed with the franchisor and sent the parties to arbitration. The Ninth Circuit sent the case back to the District Court, however, and told the District Court to reevaluate the facts to decide if the statement "no contractual obligations exist anymore" meant what it appears to say or somehow excluded the arbitration requirement.

 

If the franchisee can show that the franchisor terminated the entire contract, he may get his day in court. To see the full case, click here.

 
WE'VE OPENED A SECOND OFFICE IN SANTA BARBARA
 

Candice, Bryan and I are pleased to announce that we have opened a second office in Santa Barbara, California, to better serve our clients in that area and to expand the reach of our franchise law practice. The Santa Barbara address and telephone number are:

 

735 State Street, Suite 211
Santa Barbara, California 93101
Telephone: 805-357-0029

 

We will continue to represent franchisors, franchisees and independent owners of restaurants, retail and service businesses in the preparation and nation-wide registration of Franchise Disclosure Documents, as franchise due diligence counsel for sellers/buyers of franchisors, and as outside franchise general counsel for franchisors.

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 2012
All Rights Reserved.

 
In This Issue
Bryan Clement Joins the Firm
Barry Kurtz Featured in Premier Issue of New Online Magazine
Franchisor 101: NY's Franchise Law Has A Long Reach
Franchisee 101: I Said What I meant and I meant What I Said, I Think
We've Opened A Second Office in Santa Barbara

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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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818-827-9229

735 State Street, Suite 211 

Santa Barbara, California 93101

Telephone: 805-357-0029

www.barrykurtzpc.com
bkurtz@barrykurtzpc.com