Committee Activity in Review

As published in the NY Business Law Journal:

WINTER 2014 NY BUSINESS LAW JOURNAL
FRANCHISE, DISTRIBUTION AND LICENSING LAW COMMITTEE

The Business Law Section held its Fall meeting at the beautiful Equinox Golf Resort and Spa in Manchester, Vermont between September 10 and September 12, 2014.  In conjunction with the Fall meeting, the Franchise, Distribution and Licensing Law Committee participated in a CLE program and offered a seminar exploring and explaining various ways for a franchisor to structure its franchise offering and to implement the development of its franchise program. Your Chairman served as moderator for the program, and committee member Thomas Pitegoff, together with Edward (Ned) Levitt, from Toronto, Canada, made presentations regarding the topic.

Despite the relatively compact time frame available for presentation, both the session and the paper which accompanied it were widely encompassing, covering a variety of general domestic franchise issues (e.g., Advertising Fund contributions, transfer issues, term and renewal issues, venue and applicable law). The program also explored multi-unit development deals, both domestically and internationally, and, in that context, examined topics such as territorial exclusivity, the types of entities that area developers would utilize, the types of agreements with respect to these development arrangements, and the particular issues attendant on the expansion of franchise systems internationally.

The session, which was offered for full CLE credit, was well attended and provided the attendees a variety of insights into the various ways to implement and expand a franchise system, both domestically and internationally, at a level usually reserved for those attorneys who are sophisticated practitioners in the field. As such, the attorneys present had an opportunity to hear about and assess the typical (and atypical) means by which franchisors expand their systems, as well as the pitfalls that might attend some of those expansion methods.

During the last several months, our Committee has continued to work on the proposed modifications to the New York State Franchise Sales Act. The proposed modifications, which are presently on the legislature’s calendar for consideration, are intended to be coordinated with the views of the New York State Attorney General’s Office and, by the time this report “goes to press,” a meeting will likely have been held with that Office in order to discuss the Attorney General’s views with respect to the proposed legislation and, in all likelihood, to incorporate those views into the proposed legislation. Our Committee is seeking to make the New York law consistent with the Federal Trade Commission Rule, the federal statute which regulates franchise offerings, and to make the law of our state more “franchise friendly.”

For further information regarding the Committee and its activities or with respect to the next Committee meeting, please contact Committee Chair Richard L. Rosen (rlr@rosenlawpllc.com or at 212-644-6644).

-- Richard L. Rosen, Chair  

SUMMER 2014 NY BUSINESS LAW JOURNAL
FRANCHISE, DISTRIBUTION AND LICENSING LAW COMMITTEE

Since our last report the Franchise, Distribution and Licensing Law Committee has had two significant occurrences. On January 29th, 2014, the Committee held a meeting in conjunction with the Annual Meeting of the Business Law Section. An (unusually) robust group of 23 franchise attorneys, ranging from those with long time experience in the field to younger folks seeking to learn about this area of law, attended the meeting, which was held at the New York Midtown Hilton. The meeting featured a presentation by Michael H. Seid, founder and Managing Director of MSA Worldwide (together with your Chairman), regarding the means, methods and criteria utilized in evaluating whether a business is suitable for formulating a franchise program. The presentation, which included a variety of forms of agreements and other franchise related documents, was designed to qualify for CLE credit, which was likely a factor in the increased attendance at the meeting. Mr. Seid, one of the foremost franchise consultants in the industry, provided a variety of anecdotal examples and general information, which proved to be of great interest to those in attendance.

On March 13th, your Chairman, together with Tom Pitegoff and David Oppenheim, former Chairs of the Committee, and Kevin Kerwin, Associate Director of Governmental Relations at the New York State Bar Association, met with representatives of the New York State Attorney General’s Office to discuss the status of proposed modifications to the New York Franchise Sales Act that had been previously drafted by a subcommittee of the Franchise, Distribution and Licensing Law Section. The purpose of the meeting was to discuss the proposed modifications to the current statute, with a goal of reaching a consensus with the Attorney General’s Office with the hope, if possible, of presenting a “united front” to the New York State Legislature in seeking to formulate a bill amending the present statute. Our Committee is seeking to make the New York law more “friendly” to the franchise industry, generally, and to make it consistent with the Federal Trade Commission Rule, the federal statute which regulates franchise offerings. The meeting, which was held at 120 Broadway, in Manhattan, was productive and will, hopefully, set the stage for further discussions with the Attorney General’s Office with respect to this proposed legislation, which is now on the Bar Association’s “list of priorities.” For further information regarding the Committee and its activities or with respect to the next Committee meeting, please contact Committee Chair Richard L. Rosen (rlr@rosenlawpllc.com or at 212-644-6644).

-- Richard L. Rosen, Chair 

winter 2013 NY business law journal
Franchise, distribution and licensing law committee

Since the last report of the Franchise, Distribution and Licensing Law Committee, the Committee’s activities have primarily been focused on tracking and analyzing the progress with respect to our proposed modifications to the New York Franchise Sales Act and the accompanying regulations thereto. The Committee is coordinating with the Legislative Affairs Committee of the Business Law Section in planning a strategy to effectuate the arduous task of shepherding the proposed changes to the Franchise Sales Act through the State legislative process. As we have previously noted to members of the NYSBA, certain inconsistencies exist between the present New York statute and the amended Federal Franchise Rule, and the legislative changes proposed by the Committee are designed to make the New York statute more consistent with the Federal Rule and, in addition, to make New York State a more attractive venue for franchisors who, in the past, have shied away from setting up their franchise “base” within our State.

Several members of the Committee attended the Fall meeting of the Business Law Section, including a meeting of the Section’s Executive Committee, held October 3-5 in Lenox, Massachusetts. At this meeting, amongst other things, the proposed changes to the New York State Franchise Sales Act were discussed, and the Legislative Affairs Committee indicated that our proposed legislation was high on its “list of priorities” to pursue. Finally, the Committee plans on holding its next meeting in conjunction with the Annual Meeting of the New York State Bar Association, scheduled to be held on January 28, 2014 in New York City. For further information regarding the Committee and its activities or with respect to the next Committee meeting, please contact Committee Chair Richard L. Rosen (rlr@rosenlawpllc.com or at 212-644-6644).

-- Richard L. Rosen, Chair

summer 2013 NY BUSINESS LAW JOURNAL
FRANCHISE, DISTRIBUTION AND LICENSING LAW COMMITTEE

The Franchise, Distribution and Licensing Law Committee has been very active this year. The Committee continues to pursue changes to the New York Franchise Sales Act and its accompanying Regulations in order to make the Act more business friendly and consistent with the Federal Franchise Rule, which was amended in 2008. The most recent Committee meeting was held on January 23, 2013. The meeting included a presentation by Aaron Chaitovsky, CPA, CFE and a Partner with the New York-based accounting firm, Citrin Cooperman. Mr. Chaitovsky’s presentation included a discussion regarding counsel’s obligation to review and understand the financial statements included in a franchisor’s Franchise Disclosure Document. The session also included a review of the basis components of financial statements prepared in accordance with GAAP, a detailed examination of franchisor cash flow statements and an identification of the critical items typically included in a franchisor’s financial statements which can reveal the financial viability of a franchisor. The next Committee meeting will take place in June 2013. Please contact committee Chair David W. Oppenheim (doppenheim@kaufmanngildin.com) for more information.

-- David W. Oppenheim, Chair

Winter 2012 NY Business Law Journal
Franchise, Distribution and Licensing Law Committee

The Franchise, Distribution and Licensing Law Committee has been very active this year. The Committee continues to pursue changes to the New York Franchise Sales Act and its accompanying Regulations in order to make the Act more business friendly and consistent with the Federal Franchise Rule, which was amended in 2008. Recently, the Committee invited Joseph Punturo, the Franchise Section Chief for the New York Department of Law, to attend and present at its Committee meeting. Mr. Punturo discussed the recently promulgated Trade Show Exemption under Section 684(1) of the New York Franchise Act; procedures for applying for exemptions under the New York Franchise Act, including discretionary exemptions; and the Committee’s proposed amendments to the New York Franchise Act and its accompanying Regulations in order to make the Act more business friendly and consistent with the FTC Franchise Rule. The Committee’s most recent meeting included a lively presentation led by Stan Friedman, a Certified Franchise Expert and a principal with an Atlanta-based franchise consulting fi rm. Mr. Friedman discussed the role that outside counsel can and should play in helping its start-up and emerging franchisor clients achieve sustainable growth. Mr. Friedman shared real world experiences about the challenges that emerging franchisors encounter when taking the leap from “start-up” to “stay-up.” The Committee’s next meeting is scheduled for January 23, 2013 in conjunction with the NYSBA’s Annual Meeting.

- David W. Oppenheim, Chair

Summer 2012 NY Business Law Journal
Franchise, Distribution and Licensing Law Committee

The committee has been very active. At its most recent meeting, in January 2012, the committee heard from Mr. Joseph Punturo, the Franchise Section Chief for the New York Department of Law, on the recently promulgated Trade Show Exemption under Section 684(1) of the New York Franchise Act and procedures for applying for exemptions under the New York Franchise Act, including discretionary exemptions, and discussed the committee’s proposed amendments to the New York Franchise Act and its accompanying regulations to make the Act more business friendly and consistent with the Federal Franchise Rule, which was amended in 2008.

Committee Chair David W. Oppenheim and member Andre R. Jaglom took part in a panel discussion in Buffalo, New York at the Ontario-New York Legal Summit, a joint two-day CLE program sponsored by the New York State Bar Association and the Ontario Bar Association. The session focused on structuring franchise systems and alternative distribution models in the United States and Canada.

-- David W. Oppenheim, Chair

Winter 2011 NY Business Law Journal
Franchise, Distribution and Licensing Law Committee

The Franchise Distribution and Licensing Law Committee holds meetings for its members and most recently presented an educational session at the Business Law Section’s Fall Meeting in Cooperstown. The committee continues to advance its proposal to amend New York’s franchise statutes that now cause almost universal confusion among those affected by their terms (including the surprises inherent in even determining if those terms apply to them). The amendments will clarify which persons, entities, and activities fall within their scope, to conform those statutes’ terms and provisions with Federal Trade Commission rules, uniform franchise offering requirements, and current usages of trade.

—David W. Oppenheim, Chair

Summer 2011 NY Business Law Journal
Franchise, Distribution and Licensing Law Committee

The Franchise, Distribution and Licensing Law Committee has been very active. It continues to pursue changes to the New York Franchise Sales Act and its accompanying Regulations in order to make the Act more business friendly and consistent with the Federal Franchise Rule which was amended in 2008. The last Committee meeting was held in January and featured a presentation by Christine Harris and Edith Wiseman of Frandata. Ms. Harris spoke to the Committee members about the 2011 changes to the SBA Franchise Registry Guidelines and Procedures and Ms. Wiseman discussed Frandata’s October 2010 Economic Forecast for Franchising in 2011 and beyond. Approximately 20 Committee members attended the meeting. The Committee is planning an “Introduction to Franchising” CLE Program for the Fall.

—David W. Oppenheim, Chair