The Iowa Startup Fair takes place on January 31, 2012 from 3 to 6 PM in various locations around downtown Des Moines, Cedar Rapids, Cedar Falls and Pella. More than 80 companies will be exhibiting throughout the state.

There are more than 50 businesses exhibiting at the Des Moines locations. Those locations are the StartupCity Des Moines offices, 317 Sixth Avenue, Fifth Floor; Amici Expresso, 206 Sixth Avenue; Foundry Coworking, 418 6th Avenue, skywalk level; and the BitMethod Headquarters, 418 6th Ave., 12th Floor.

The event is designed to give the community, investors and business people a look at the exciting things Iowa business startups are accomplishing.

I’ll be exhibiting with my startup, NotifyWorks, a cloud based software system that allows lawyers, financial advisors and other professionals to send automated email notifications to their clients even when they are away from their desks or working on something else. Come check us out!

Jon Hyman wrote on his Ohio Employer’s Law Blog that the NLRB has issued a 2nd report on social media as protected concerted activity.  If you are an employer considering discipline or termination of an employee resulting from social media activity you need to be very careful. Jon points out:

This report underscores that employees’ use of social media to discuss the workplace and work-related issues, and the impact of business’s social media policies on those discussions, remains at or near the top of the NLRB’s priorities. Because the NLRB is taking such an interest in this area, employers act at their peril if they discipline or discharge an employee for social media activities, or roll out a social media policy, without the advice and input of counsel well-versed on these issues.

Bottom line:  Discipline of employees making disparaging comments about your company through blogs, Facebook, Twitter and other sites could land you in trouble. You should read the report of the acting NLRB general counsel. It’s one thing to have rules that prohibit plainly egregious conduct through the use of social media but be VERY cautious if have rules trying to curb what employees can say about your company. 

Do you know the difference between sole proprietorships, partnerships, corporations and limited liability companies? Do you know whether to set up an S corporation or is a C corporation better for you? Are limited liability companies really all that and a bag of chips?

Be sure to join me for an information-packed webinar through MyEntre.Net on Thursday, February 2, 2012 at 12:00 p.m. CT as we discuss the common business structures and how these various legal structures vary in complexities. Plus, we’ll talk about the common misconceptions that abound in choosing a legal structure for your business.

If you’re thinking about forming a business entity soon, you won’t want to miss this seminar!

Register for the seminar today.

 

Franchisee lawyer Richard Soloman suggests there may be watershed changes in franchising over the next 15-20 years in a post on BlueMauMau. It’s an interesting post from a lawyer who has seen many franchisees lose their life savings in franchise operations gone awry.

Some prospective franchisees reading Richard’s post may be surprised. Are the problems in franchising that serious? After all, isn’t it safer to own a franchise than an independent business? The answer is an emphatic NO!!!!! The fact is that franchise businesses fail at about the same rate as independent businesses. One could argue it’s even tougher to make a franchise work financially when you consider that franchisees are required to pay royalties, advertising and other fees even when the franchisee’s business is not profitable. The notion that franchises offer a proven system that will work for franchisees really isn’t the case in many circumstances. Many franchises are neither "proven" or a "system".

I agree that franchising could use some important changes over the next 15-20 years. A few things could make a big impact in my opinion:

  1. Uniform Franchise Laws. Franchising laws vary widely from state to state. Although it wouldn’t be easy to get all the stakeholders to agree, it would be helpful for franchisors and franchisees to have uniform franchise relationship laws so that everyone is operating under more predictable standards. I don’t think most franchise lawyers see this on the immediate horizon but it should happen in my view.
  2. Unprofitable Franchisees Should Be Permitted to Terminate. Should an unprofitable franchisee be forced to stay in business or pay lost royalties for the duration of the franchise agreement? I know that risk is inherent in business and franchisees are contractually bound. Not every franchisee will be successful and sometimes failures occur through no fault of the franchisor. But most often there is blame on both sides and franchisors should acknowledge their involvement (or lack of involvement) in unprofitable franchise locations. But my idea isn’t that franchisees get off scot-free. Instead, how about lawsuit immunity for franchisors that give franchisees the right to terminate unprofitable locations? It might just lead to a better team approach.
  3. Franchisors must actually be obligated to do something under the Franchise Agreement. I’ve read franchise agreements where the franchisor is essentially not obligated to do anything for the franchisee. In one recent franchise agreement I reviewed, everything the franchisor agreed to do for the franchisee was "in their discretion".  Why should one party be obligated to do something when the other is not? Just getting the franchisee in business shouldn’t be enough for a franchisor.

Those are just a few things in my view that could level the playing field and make franchise opportunities better and safer investments for franchisees. Now I want to make it clear that I don’t view every franchisor as evil or bad. But many franchise-franchisee relationships could definitely benefit from a more even playing field. I also don’t see any these ideas occurring any time soon and I’m sure there are many franchise lawyers who think these ideas are bad anyway. Of course as George S. Patton said, "If everyone is thinking alike, then somebody isn’t thinking." 

Last night I attended the Greater Des Moines Partnership’s Annual Dinner. It was an interesting evening and I enjoyed listening to the guest speaker Christiane Amanpour discuss her experiences as a global journalist. She is obviously incredibly passionate about her work and encouraged everyone in the audience to "DO GOOD" with their work and to help the community around them. 

The Partnership also announced last night that it is continuing its support of the "Hiring our Heroes" program designed to get our unemployed Iowa military veterans back to work.  A video presented before dinner stressed the sacrifice made by so few for so many of us and the tremendous qualities that military veterans demonstrate in workplaces throughout Iowa.

Yesterday, I wrote about Above the Line America a new group formed for business people who have a "GIVE FIRST" attitude. So all of the events and conversations got me thinking, "How can I "DO GOOD" and "GIVE FIRST"?

That’s why I have decided throughout the rest of 2012, I will donate my time for any Iowa military veteran who wishes to set up a basic corporation or LLC for a new small business. It’s only a small gesture but it’s one way that I can say thanks to our veterans who have sacrificed so much for us. So if you are a military veteran in Iowa  who is starting a small business, feel free to contact me regarding this offer.

A new organization called Above the Line America is hosting a Business Growth Summit in Ankeny, Iowa on January 31, 2012 from 8:30 a.m. to 5:00 p.m. The Summit is located at the FFA Enrichment Center, 1055 SW Prairie Trail Parkway in Ankeny.

The day should be a great one. Business owners and professionals will get an opportunity to come away with an ActionPlan for their business plus listen to some great speakers including Tony Brigmon (the Original Ambassador of Fun for Southwest Airlines, Geoff Wood of Silicon Prairie News, Major Sean Quinlan (a Bronze Star recipient), Jordan Lampe of Dwolla and Angela Maiers of Angela Maiers Education Services. But best of all there is the opportunity to network with many other business-minded people like you.

One of the advisory board members for Above the Line America is my friend Andrew Clark of createWOWmarketing. Andrew and three others started the group to create a network of business-minded individuals with a "give first" attitude. If you have any questions regarding the organization or the event be sure to contact Andrew.

You can register for the event here.

The first ever Iowa Startup Fair is taking place on Tuesday, January 31, 2012 from 3 to 6 pm. During the fair, new businesses will set up informational tables to showcase thier projects for an audience of business, investment, civic and other community members.

In Des Moines, the Startup Fair locations will be at the Midland, Bank of America and Liberty Buildings. In Cedar Rapids/Iowa City, Vault Co-Working will host. A location in Pella has not yet been determined and other regions in Iowa will be added soon according to the site.

I’ve decided to participate in Des Moines with my new startup, NotifyWorks. Notifyworks is a web-based automated email system that enables lawyers and other professionals to proactively notify their clients of dates and deadlines.

Iowa entrepreneurs have an opportunity to connect with potential investors at the i2Iowa Investors and Innovators Forum on April 12, 2012 at Veterans Memorial Auditorium. Business owners and entrepreneurs can pitch their businesses to investors from four tracks which include:

  1. Life and Bio Sciences
  2. Information Technology
  3. Advanced Manufacturing
  4. General Business

Companies can apply online through February 7, 2012. The goals of the program are to 1) fund companies and 2) showcase the amazing investment opportunities in Iowa. The program is presented by the Technology Association of Iowa and sponsored by the department of Iowa Economic Development.

Looks like another great opportunity to continue the tremendous momemtum Iowa is experiencing in the startup business community. Check it out!

I saw an interesting post from franchise attorney Michael Webster on the BlueMauMau site on Negotiating Your Franchisee Rights. Some of his helpful nuggets:

  1. Review the FDD to see if they are using franchise brokers – you may be able to knock something off the franchise fee by asking for the broker’s rebate.
  2. Budget for professional advice. Hire an experienced franchise attorney to negotiate an addendum or side agreement.
  3. Get rid of the personal guaranty.
  4. Get rid of the right of first refusal – it drives down value when selling.
  5. Avoid franchises that limit your use of social media for local marketing.

Read the full article from Michael for more insight. Is it likely you will you get everything on Michael’s "wish list"? Probably not. But it is worth asking. Don’t be fooled into thinking that franchisors can’t and won’t negotiate franchise agreements.

The advice on the use of social media is often overlooked by prospective franchisees. In my opinion, a franchisor that won’t allow a franchisee to market using social media is stuck in the dark ages. It just doesn’t make sense in today’s business environment.

See also my blog post on 11 Things Every Fanchisee Should Know. I am an absolute stickler on the trademark indemnification provision. If a franchisor won’t indemnify you for the use of THEIR trademark, what else won’t they do for you?

I was researching some issues for an LLC operating agreement and ran across an excellent post from the Wisconsin Business Law Blog on the fact that capital calls are often overlooked by LLC investors. Attorney Todd Goodwin provided the following example,

[i]f a "capital call" provision exists and is exercised by the majority members or by the managing member and one of the members cannot afford to put in the required capital, such member could face expulsion from the LLC, dilution of their ownership percentage in the LLC, super-dilution of their ownership percentage to the point where their percentage is effectively worthless, or other negative consequences. (There can be other consequences, but these are some of the typical ones seen in these types of agreements).

I have seen this happen several times with limited liability companies. It happened frequently for investors during the latest economic downturn, especially with real estate investors who could not meet their capital calls. Many of those real estate investors faced expulsion as a result. As Todd points out, the capital calls are neither bad or disadvantageous, but are often important for the operation of the LLC. As an investor it is important to review and understand fully the terms of the capital call provisions BEFORE you sign the operating agreement.