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Vol 16 (2018) - Issue 6

Advocating to protect the franchise business model – Stories from the trenches on the joint employer issue

Ryan Eickmeier, Canadian Franchise Association, Toronto, Canada, Stephen Giles, Franchise Council of Australia, Malvern East, Australia, Matt Haller, International Franchise Association, Washington, DC, USA, Josh Merin, International Franchise Association, Washington, DC, USA, Tao Xu, DLA Piper LLP (US), Reston, USA

The "joint employer" concept has become a controversial issue in a number of jurisdictions, confirming that the principle of independence of franchisor and franchisee is not universally accepted or understood. An increasing number of legislative and regulatory proposals around the world would blur the boundaries between the franchisors and franchisees on employment related issues. The franchising industry has responded with efforts to educate lawmakers and regulators, and to advocate for the central principle of separation that has greatly contributed to the success of this business model over the last few decades. This article examines the recent episodes in Australia, Canada and the United States, and offers an overview of the resources that are available to franchise advocates around the world who are engaged in such efforts.

Spanish central franchisors’ registry closes

Lourdes Ayala and Antonio Ballesteros, Bird & Bird, Madrid, Spain

By virtue of the Royal Decree Act 20/2018 of December 7th, in full force and effect since last December 8, 2018, the existing Spanish Central Franchisors' Registry (dependent on the Ministry of Economy, Industry and Competitiveness) has been closed and the disclosure obligations bestowed on franchisors until such date have been abolished.

The basic mistakes that franchisors often make and how to avoid them

Dr Mark Abell, Bird & Bird, London, UK

This journal deals mainly with the technical legal issues that franchisors face when expanding internationally. However, many of the difficulties that franchisors face when embarking upon an international roll out are more managerial and organisational than legal. If lawyers want to be able to support their franchisor clients as they grow internationally, they need to understand what these problems are and how they can help to ensure that they are avoided.

The state of franchising in the USA

Mark Kirsch and Diana Vilmenay, Gray Plant Mooty, Washington, D.C., USA

Franchising continues to be a thriving, successful, and growing business model in the U.S., and one that continues to add to the overall economic growth of the country. That is not to say, however, that there are not headwinds facing franchising. For example, the unsettled joint employer standard continues to threaten the fundamental business model. In addition, new threats and challenges arise every year—such as the multiple-prong attack on employee anti-poaching provisions in franchise agreements, or discriminatory minimum wage legislation. Despite areas of concern, franchising appears strong heading into 2019.