March 22, 2010

Our Mini-Theme: Franchise Law

Steven K. Fedder

As of 2005 there were more than 909,000 franchised business establishments in the United States alone, providing more than 11 million jobs. These businesses directly or indirectly are responsible for the creation of nearly 21 million private sector jobs with an economic output of more than $2.3 trillion per year. According to the International Franchise Association, in 2010, the credit crisis in the United States will result in a shortfall of $3.4 billion in lending to franchise businesses, which will result in 134,000 jobs not created and $13.9 billion in lost economic output.

This issue's mini-theme on franchising is designed to familiarize business lawyers with some of the important issues in franchising today. We are fortunate to be able to publish articles by some of the leading figures in the franchise bar. Susan Grueneberg and Jon Solish set the tone for this issue of Business Law Today by providing a broad overview of franchising, franchise regulation, and commonly encountered legal issues affecting the franchise relationship. Rupert Barkoff and Gerald Wells provide practical advice to the lawyer who is about to assist his or her client in reaching an informed decision as to whether and how to develop a franchise system. Liz Sigety and Seth Stadfeld provide practical advice to the business lawyer representing prospective franchisees.

On more specific topics, Marisa Faunce and Benjamin Reed write on the critical issue of trademark and brand protection strategies for franchisors. Alan Schaeffer has contributed a timely and thoughtful article on brand licensing programs that may unwittingly run afoul of state and federal franchise laws.

And from our neighbors from the north, John Rogers and Larry Weinberg, two prominent Canadian lawyers active in the ABA Forum on Franchising, provide insight into the issues presented when American companies expand their franchise systems into Canada. Shelly Spandorf, contributing from the left coast, provides us with a cautionary (and true) tale of what can happen to franchisors and their senior executives when they fail to comply with California's Franchise Investment Law.

We hope that you find these articles on various franchising issues to be both provocative and informative.

Steven K. Fedder