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Vol 4 (2006) - Issue 2

Franchising: Data protection and e-commerce issues in the United States

Lee Plave, Partner, DLA Piper Rudnick Gray Cary US LLP, Washington, D.C. and Inna Tsimerman, Corporate Counsel, CS STARS, LLC, an MMC company, Chicago.

While many of the considerations involved in doing business over the Internet are the same as for conducting a business in a regular storefront in the U.S., franchisors must pay particular attention to the collection, storage, and use of personally identifiable information collected online. Heightened scrutiny combined with new and pending federal and state legislation in the United States require that companies make information privacy and security a priority and be prepared to deal with any security breaches that occur.

Princeton Review litigation puts renewal condition to the test

Peter J. Klarfeld, Partner and David W. Koch, Partner, Wiley Rein & Fielding LLP, Washington, D.C.

The ruling in Test Services, Inc. v. The Princeton Review, Inc validates a franchisorís legitimate interest in putting renewing franchisees on the same contractual footing as those entering the franchise system under the franchisorís current form of franchise agreement.

EU Report

John Grayston, Partner, Eversheds, Brussels

An update on the European Commission's actions against Member States, initiatives on cross-border clearing and settlement systems, technology transfer and the Services Directive.

US Report

Lauren J. Murov and Michael G. Brennan, DLA Piper Rudnick Gray Cary US LLP, Chicago

In the recent case of Pirtek Fluid Systems Pty, Ltd. v. Layer the U.S. District Court for the Middle District of Florida held that the master franchisee of an industrial and hydraulic hose business representing the franchise systemís Australian franchisor in the United States, lacked standing to maintain a suit for trademark infringement under the Lanham Act against a subfranchisee without joining the franchisor and owner of the allegedly infringed trademarks.

Joint ventures in international franchising

Dr Martin Mendelsohn

A joint venture generally arises where two or more existing entities decide to establish a business relationship in which they will participate jointly. There is no law on joint ventures but the vehicle chosen for the venture may well be subject to a legislative regime. Many of the legal issues with which a franchisor will be confronted when considering entry into a foreign market will have to be taken into account when considering a joint venture for the achievement of the franchisorís objectives.