This past week I attended the ABA Franchise Forum in Baltimore for the fifth year in a row. One of the traditions of the Forum is the annual presentation on Franchise and Distribution Law Developments. This year, Lee Plave and Stuart Hershman delivered an excellent presentation during which Iowa took center stage with the KFC decision discussed in my last blog post. Stu Hershman described it as perhaps the most significant franchise case of the year.
The presenters raised the question about whether franchisors should voluntarily disclose royalty revenues to the Iowa Department of Revenue in order to avoid penalties and interest. It will also be interesting to see how aggressive Iowa (and other states) will be in pursuing out-of-state franchisors for income and other tax purposes in light of the U. S. Supreme Court’s refusal to hear an appeal of the Iowa decision. No matter what the KFC decision is a case franchisors should not ignore.