Spring 2014: VOL 17, NO. 2

FTC’s Data Security Authority Survives Challenge in Wyndham

Features

FTC’s Data Security Authority Survives Challenge in Wyndham

A recent ruling in the Federal Trade Commission’s closely-watched lawsuit against Wyndham Worldwide Corporation affirms the FTC’s authority to regulate data security under the FTC Act. A federal court in New Jersey denied a motion to dismiss the Commission’s civil complaint arising from data breaches on computer systems operated by Wyndham and its franchisees. The court’s ruling in Federal Trade Commission v. Wyndham Worldwide Corporation, Case No. 13-cv-01887, should be a wake-up call for all businesses that handle consumer data, but it has particularly important implications for franchisors, who now must evaluate their obligations to ensure proper data-security practices on franchisee-controlled computer systems that connect to a franchisor-controlled or shared network. Read more . . .

The “Party-Appointed Clause” is a popular option in arbitration. It provides for a three-member panel, with each party choosing one arbitrator, and the two chosen arbitrators selecting the third. When you select an arbitrator to serve as a party-appointed arbitrator – or serve as one yourself – it is important to carefully review Canons III, IX, and X of the Code of Ethics. Read more . . .

Africa presents some of the most dynamic markets in the world for franchising. Within the next five years, seven of the 10 fastest growing economies of the world will be in Africa. Foreign direct investment into Africa in 2015 is estimated to reach US$54 billion. Some 200 to 300 international brands are reported to be active in Africa, in addition to a thriving market for indigenous franchise systems ranging from fast food, retail, and hospitality brands to micro franchises, which use single-person franchise units with seed capital to support key infrastructure needs. Read more . . .

Lawyers typically view the accountant's role in franchising to be mainly auditing the franchisor’s financial statements and consenting to their use in the Franchise Disclosure Document (FDD). But accountants can play other valuable roles, from developing franchise programs, to advising on certain items of the FDD, to consulting with franchisors and franchisees on business issues. Read more . .

In an inadvertent franchise case, plaintiffs were equitably estopped from rescinding a license agreement based on violations of Minnesota and Wisconsin franchise laws because their counsel had reviewed and revised the agreement, recommended that they execute it even though no franchise disclosure document (FDD) existed, and then asserted 20 months later that the arrangement “undoubtedly was a franchise.” In U-Bake Rochester, LLC v. Utecht, 2014 WL 223439 (D. Minn. 2014), a federal district court in Minnesota dismissed the plaintiffs’ claims for rescission based on failure to register and disclose under the Minnesota Franchise Act (MFA) and the Wisconsin Franchise Investment Law (WFIL). Read more . . .

The main issues we consider for any Forum program or other Forum endeavor are whether it supports our mission to be the preeminent forum for the study and discussion of the legal aspects of franchising and whether it will benefit our membership. We have many exciting things happening in 2014 that do both, and I want to take this opportunity to share them with you. Read more . . .

Like ABC’s Wide World of Sports back in the day, THE FRANCHISE LAWYER “spans the globe to bring you the constant variety of” – franchising! In this issue, you will get an update on the most closely watched questions in privacy law. Read more . . .

One of the biggest benefits of membership from an in-house perspective is access to resources – not just to written materials but also to human resources. The annual meeting and the Forum’s books and publications, including The Franchise Lawyer, and the Franchise Law Journal, help keep in-house counsel abreast of changes in the law and current trends in franchising. Often, as in-house counsel, our resources are limited, and our ability to research issues is restricted by budgetary and time constraints. The Forum provides a “one-stop shop” to access authoritative and reliable materials that address many of the issues we deal with daily. The ability to electronically search papers from prior annual meetings and previously published articles alone is worth the price of membership. Read more . . .

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