Rush on Business : Iowa Corporate Lawyer & Attorney : Rush Nigut of Brick Gentry Law Firm : Serving Des Moines, Cedar Rapids, Davenport, & Sioux City

The Iowa House and Senate recently passed legislation to give consumers a private right of action for fraud claims.  Previously Iowa was the only state in the nation that did not provide such a right to its citizens.  

Consumer advocacy groups say there are too many exemptions under the bill, which is expected to be signed by Governor Culver, including services provided by insurance companies, banks, lawyers, cable TV providers, doctors, veterinarians and architects. But overall this is a positive step for protection of Iowa's consumers. 

The Iowa Attorney General is understandably pleased as it will now allow private lawyers to pursue consumer fraud claims and will help alleviate a backlog of these claims which were handled previously by the AG's office.

Consumers may be awarded up to three times the amount of the actual damages plus an award of reasonably attorney's fees if successful.  This will undoubtedly put pressure on businesses accused of fraud claims to resolve their differences with consumers.  

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One of the best things about blogging is the great people I have had the opportunity to "meet". One of my favorites is a franchise consultant and blogger from Cleveland, Ohio named Joel Libava.  The Franchise King and I share a passion for helping prospective franchisees obtain information to properly research franchise opportunities. I have read his eBook on the Essential Steps to Researching a Franchise Opportunity and I encourage you to read it if you are interested in becoming a franchisee. The following is a guest post from the Franchise King on franchise research and a little about his eBook.

Information is power. Getting the right kind of information is even more powerful. It never fails. I’ll be packing up my presentation equipment after I’ve finished presenting a seminar or class on franchising, and someone will saunter on over to me and say:“I wish I would have met you before I bought my franchise. If I would have known then, what I know now….”Or, during the Q & A time I always set aside towards the end of a presentation, I‘ll hear this; “I never knew that I could call former franchisees of a franchise system, and find out why they weren’t franchisees anymore.”

It’s safe to say that almost no one knows how to really research a franchise opportunity. After all, how could they possibly know? Did you know how to do the right kind of research before you purchased your first new car? Did you know how to research an area to see if it was a good one for your first home? Let’s assume that someone had to teach you how to research major purchases like a car or your first home. If not, I’ll bet you bought a book or tow, and learned how to do it, right? You didn’t “make things up as you went along, did you?” I hope not. 

Purchasing a franchise business of your own is also a major purchase. Do you know the proper research steps? If not, are willing to learn and follow them?

I wrote an eBook last year called “The Essential Steps to Researching a Franchise Opportunity.” It has had some nice reviews, and the people who have purchased it are glad they did. It lays out the research steps in an easy to follow format, and is essential reading if you are seriously thinking about investing in a franchise of your own. 

When it comes to investing in a franchise, there are certainly some legal issues you need to be aware of. In my book, I discuss who to use and who not to use, in all things legal; “It’s now time to find and meet with a lawyer who is familiar with franchise law. Even though you may be tempted, this is not the time to use Uncle Sol, or Aunt Martha, your family attorneys. {Unless they also happen to be small business/franchise attorneys!}You may feel that using your Aunt or Uncle for a review of the Franchise Disclosure Documents would be wise, and that it is smart budgeting, but it may end up costing you more in the long run.”

In the book, I also explain how to go about finding some appropriate attorneys that are thoroughly familiar with the unique laws that involve the business model of franchising. I also give you some questions that you should ask prospective franchise attorneys;

• Do you regularly review franchise contracts and Franchise Disclosure Documents? 
• Are you totally up to date on local franchise laws?
• Can you recommend what types of business entity to set up that will protect us?
• What will you charge for the review?

The legal aspects are really important, and you definitely need to have a good understanding of what is involved in starting and operating a franchise. The laws that are in place are complex, but a good lawyer can help you understand them.

There are several steps in researching a franchise, and the legal portion is only one of them. If you learn how to conduct your research correctly, your decision on becoming a franchise owner will be a little easier. It may be a little safer, too.

{Joel Libava is The Franchise King, and is the King over at Franchise Selection Specialists Inc. a Cleveland, Ohio franchise consulting and marketing firm. His award winning blog is The Franchise King Blog. His eBook can be found at http://www.FranchiseResearchSteps.com.}

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I'll be speaking about the dangers and pitfalls of the electronic workplace this afternoon at the Iowa Employment, Training and Benefits Conference sponsored by HR-One Source. 

Matt Brick and Doug Fulton of Brick Gentry are also presenting at the conference.  Matt is providing the employment law update and Doug will present on FMLA basics. 

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A few weeks ago I attended a conference relating to venture capital in Iowa. During the talk several of the panelists commented that they would not sign a non-disclosure agreement prohibiting them from discussing a potential business idea they learned about from someone seeking capital. The venture capitalists did not want potential liability for ideas that they might hear several times in a week. Almost every single panelist indicated that sliding a non-disclosure agreement over the table at the beginning of the meeting was a deal killer.

That discussion led into a great discussion involving non-compete agreements and employee non-solicitation agreements. The participants had mixed feelings about non-compete agreements. It is often tough for entrepreneurial types to admit that restricting another person from competition is a good idea. However, all were committed in the importance of employee non-solicitation agreements. An employee non-solicitation agreement prevents one of your employees from hiring one or more of your employees for a set time period, generally about 1 year.

In the end the panelists believed that the human capital was critical to the success of the business, perhaps even more so than the clients themselves. An interesting take indeed. 

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This is a guest post from Mike Colwell, Executive Director of the Business Innovation Zone (BIZ).

Why bother doing a background check on a potential employee?  Well, not too long ago a friend of mine did not and ended up with a new credit card in his business’s name he knew nothing about.  By the time he found out, there were thousands of dollars in charges and a mess to deal with.  This day and age you need to check the background of the people you plan to hire.  At a minimum do a local criminal background check.  Consider asking the applicant to sign a form giving you permission to do the background check. Even if the information is public just asking permission may provide for an interesting discussion.  This is especially important when hiring someone for an accounting or other financial job.  In this case you may want to consider a national criminal background check.

How do you go about doing these types of checks? Here in Des Moines, I turn to my friend Katie Roth at Portico HR. Any good HR agency should be able to either directly assist you or provide you with an online or local resource that is reputable. Now more than ever, it is important to hire wisely and protect your business from fraudulent activity.

BIZ is a community sponsored non-profit business accelerator designed to provide economic growth in Central Iowa through the development and expansion of entrepreneurial enterprise. 

From Rush:  Interested in writing a guest post for Rush on Business? Please contact me at rush.nigut@brickgentrylaw.com.  

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