Creative Representation | Expert Litigation

It May Not Be A Franchise But It May Be A Seller Assisted Marketing Plan – by Darryl Hart

As noted in my previous blog post, to be considered a franchise in California an arrangement has: (a) the grant of the right to do business; (b) under a “marketing plan or system” prescribed in substantial part by the franchisor; (c) association with the franchisor’s name, mark, symbol, advertising or something else that identifies the franchisor and (d) a “franchise fee”, which is just about any payment to the franchisor. Some people try to avoid being a franchise by trying to have the grantee operate without one of the elements. Most don’t want to forego the fee so they think that they can allow the grantee to use less than the grantor’s complete business system and avoid the “marketing plan or system” element or permit use of the system and prohibit the use of any means of identifying the grantor. However, problems exist with both of these approaches.

Unintended Franchises Keep Popping Up – by Darryl Hart

A couple of nice young people I will call “clients”, since that is what they became, came in several weeks ago with an agreement prepared by another law firm that covered an arrangement granting to a third party the right to establish a business using a trademark belonging to the clients, along with the clients’ business format and featuring the clients’ products. The third party had to pay an initial fee and an ongoing payment for these rights as well as having to comply with quality controls specified by the clients, meeting the design requirements of the client and complying with the supply, sourcing and other requirements and limitations specified by the agreement.