All Business has a decent article describing the ten key provisions of a franchise agreement.  However, I do take issue with the comment in Section 1 that "most franchisors offer ongoing support including administrative and technical support."

As I discussed in my last post on franchising, it is my experience that "most" franchisors DO NOT offer much in the way of ongoing support including administrative and technical support.  I believe this is a major item that separates the good franchisors from the bad ones.  And trust me, the MAJORITY of franchisors I have seen are downright awful in this category.

The majority of franchisors are good at only one thing – getting you into business.  After that, you’re on your own and you’ll be left to wonder why you are paying all those franchise royalties.  Perhaps harsh words for the industry overall but the truth hurts.  If you are buying a franchise make sure to do your due diligence and find those franchisors with a system for ongoing support.  Otherwise, why buy a franchise?

 

With the help of Doug Mitchell and Andy Brudtkuhl I will be going live with an Interactive Learning Environment to complement this blog very soon.   The Rush on Business Legal Wire will focus primarily on employment law, franchise due diligence  / investigation issues and business purchase or sale considerations.  I also hope to attract top speakers to participate in the process.  The online seminar presentations will include in-depth written materials, audio presentations, podcasts and possibly video.

Forums will also be available for you to share your insights and ask questions.  Similar to the blog format, I won’t be able to answer questions regarding specific situations but we can discuss topics generally.

I welcome your comments and suggestions on topics you would like to hear more about.

Don’t forget that Iowa’s smoking ban in public places starts July 1, 2008.  If you are a business interested in learning more about compliance with the new law please visit the Iowa Department of Public Heath site at www.iowasmokefreeair.gov.

An informative Q & A concerning the smoking ban is available here.

Bar owners in particular are upset about the new law.  Is a challenge in the works?

 

 

 

photo on flickr by greefus groinks

 

While discussing a franchise case recently an attorney working with me observed that the franchisor really didn’t agree to do anything for the franchisee in its franchise agreement.

Unfortunately most franchisees are under the mistaken belief that franchisors will provide all kinds of support.  When it doesn’t happen and the business relationship has fallen apart, the franchisee is surprised to learn that the franchisor isn’t contractually obligated to do much of anything.  Which generally means that if a lawsuit occurs the franchisee may have very little recourse.

The solution:  Franchisees should discuss specifically with the franchisor exactly what the franchisor is going to do to support the franchisee during the term of the agreement.  If the franchisor makes promises that are not contained in the franchise agreement, ask for those promises in writing.  If the franchisor won’t put those promises in writing be ready to walk.   And never, I mean NEVER, believe the franchisor that tells you they won’t hold you to the terms of their written agreement.  You can be assured that the franchisor’s lawyer in any lawsuit will never acknowledge that such a statement was ever made and most franchise agreements are written so that any such statement could not be used as evidence anyway.

Ulitimately there is no validity to the claim that franchise operations are less likely to fail than non-franchise operations.  A franchisor that just gets you into business doesn’t offer you much.  Always do your homework, ask the tough questions and demand answers.

Employers have an obligation to prevent sexual and other forms of harassment in the workplace.  Unfortunately some employers are under the mistaken belief that their sexual harassment policy adequately covers them.  Here are some common mistakes I have noticed while conducting employment compliance reviews:

  • The written policy against harassment doesn’t include an anti-retaliation provision for those employees who report harassment.
  • The written policy does not provide and communicate in writing multiple channels for the complaint procedure. Employees should be able to report harassment to more than one person within the company. The complaint process should be clearly defined in your employment manual.
  • Supervisors are not trained each year and supervisors are not required to report harassing conduct.  Consequently employers often miss out on a possible defense in any lawsuit.
  • Once notified of harassing conduct  employers fail to take immediate action to investigate.  Employers have the attitude that the employee must "deal with it."  Complaints of harassment are often not taken seriously.
  • Offenders are not disciplined or terminated as appropriate.

Commit these mistakes at your peril.

 

 

I was shocked and saddened to learn of the death of Des Moines entrepreneur Jim Goodman (46) who died during the Hy-Vee triathlon yesterday.  He suffered a heart attack during the swim phase and although rescue workers pulled him from the water, Jim passed away at a local hospital.

 Jim was the CEO of Emerging Growth Group and also led VentureNet Iowa.  VentureNet Iowa is an organization dedicated to creating wealth and job creation through "orphan" technologies.  It was through these ventures that I got to know Jim.  He was an incredibly hard worker and cared deeply about the future success of entrepreneurs in Iowa.  When I appeared on his Iowa Business Hour radio program last month I could never have imagined I would be one of his last guests.

As Brett Trout said on Twitter about Goodman, "He was a visionary leader and entrepreneur and his passing is a great loss for our city."  But Jim’s passing will also be felt throughout Iowa as no one  I have seen was more committed to assisting rural entrepreneurs in our state gain access to capital and resources.

My heart goes out to Jim’s wife and three daughters.  Jim Goodman will be missed.

Jonathan Frieden of the E-Commerce Law Blog offers some excellent advice that companies should refrain from copying another company’s Web site terms of use policy.  Jonathan says that even sophisticated companies are tempted to reduce legal expenses by copying such policies.

Iowa intellectual property attorney Brett Trout has also offered the same advice.  As Brett pointed out in his post, an Iowa company looks pretty awkward explaining to a court why its dispute should be tried in Albuquerque.    

The bottom line is that even if you use standard terms of use policies and other online policies you will need some customization for your particular business needs.  Discuss with your lawyer whether he or she has standards forms that can be customized for your business.  Most eCommerce lawyers have such forms.  But it is a good practice to avoid directly copying the terms of use and other online policies of other companies.

 

Nascar has been sued by a former technical inspector in the Nationwide series.  The African-American woman seeks at least $225 million in her claims for sexual harassment, racial and gender discrimination and wrongful termination.  In the lawsuit, she alleged she was referred to as "Nappy Headed Mo" and "Queen Sheba," by co-workers, was often told she worked on "colored people time," and was frightened by one official who routinely made references to the Ku Klux Klan. In addition, she claims male co-workers made sexual advances, two of whom allegedly exposed themselves to her, and graphic and lewd jokes.

If true, those claims are indeed strong evidence of harassment and discrimination.  But what’s worse is that her supervisor allegedly ignored her complaints and dismissed by saying that the guys were "former military guys" with a rough sense of humor and that she would just need to "deal with it".  Now, Nascar must "deal" with a huge lawsuit.  And in case they didn’t notice, this predominately white and male sport is a fairly easy target in a case of this nature.

Nascar should have heeded several of my tips on how to avoid employment lawsuits.  Th two that quickly come to mind are to treat all employees with respect and to take action promptly to investigate when complaints occur.  If you are a supervisor in an organization where harassment or discrimination is suspected you had better not tell the employee to simply "deal with it".  That’s going to get you sued every time. 

 

Brick Gentry P.C. is willing to aid lawyers that may have been displaced from their offices by flooding in Des Moines.  We have a limited amount of office space and some conference room facilities we can make available. 

If you are lawyer in Des Moines displaced by the flood and need some work space or a place to meet clients temporarily, please call me at 271-1744.

 

Throughout the country critics complain that courthouses are flooded with lawsuits.  In Iowa our courthouses are flooded – literally.

Be sure to check out these AMAZING aerial photos of the flooding in Cedar Rapids, Iowa  including the local courthouse.  Cedar Rapids even has its own version of Alacatraz (better known as the Linn County Jail).

After 1993, I never dreamed I would see this kind of flooding in my lifetime.  Many experts have said this is a 500 year flood.  Unfortunately it’s really just fifteen.

For more on Iowa’s flooding please visit www.iowaflood.com.