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Cutting the red tape: recent amendments to Ontario's franchise disclosure act
Lapointe Rosenstein Marchand Melançon LLP
  • Canada
  • 24 November 2020

In 2017 the Ontario government enacted the Cutting Unnecessary Red Tape Act with the objective of alleviating unnecessary regulatory burdens for businesses. The act provided for a series of proposed amendments to Ontario's franchise disclosure legislation and ultimately came into force on 1 September 2020. The amendments include measures to clarify the province's franchise laws and temper or delay franchisors' disclosure obligations towards prospective franchisees in certain circumstances.

Post-term non-compete clauses in franchise agreements becoming more challenging to enforce
Aramis Law Firm
  • France
  • 10 November 2020

In practice, non-compete clauses are often enforced in France if they meet the general conditions required for the validity of non-compete clauses under French law. However, this traditionally favourable approach to post-term non-compete clauses in franchise agreements was overturned by the Macron Act 2015 in relation to retail businesses. A recent Paris Court of Appeal decision provides an interesting illustration of this new provision in the retail sector.

Guide to international expansion in the education sector – part two
Fieldfisher LLP
  • International
  • 03 November 2020

School closures, social distancing, remote learning and a reduction in international travel and student exchange for the foreseeable future are all placing a significant strain on businesses in the education sector. Nevertheless, with every crisis comes opportunity. For the education sector, international expansion will be an important way of securing long-term financial viability through the creation of new revenue streams and the development of new edtech innovations.

What legal impact has the COVID-19 pandemic had on the franchise sector so far?
Noerr LLP
  • Germany
  • 06 October 2020

The COVID-19 pandemic continues to significantly affect the franchise sector, along with many others. In May and July 2020 the German Franchise Association issued a guidance document which provided an overview of the COVID-19 Mitigation Act and the associated legal issues specific to franchising. A few months on, this article examines which issues remain the most relevant for franchising practice.

Podcast: how to prepare your business for franchising
Fieldfisher LLP
  • United Kingdom
  • 06 October 2020

In the wake of the COVID-19 pandemic, the franchise model will play an important role in economic recovery, helping individuals to take their first steps into business ownership, presenting opportunities to established operators to grow their portfolios and enabling brand owners to expand and regain or grow their market share. This podcast explores the key legal considerations for any business which is preparing to franchise.

Surprise! Rescission notice can be served in a pleading
Lapointe Rosenstein Marchand Melançon LLP
  • Canada
  • 22 September 2020

Ontario's Arthur Wishart Act (Franchise Disclosure) requires franchisors to provide adequate pre-contractual disclosure to potential franchisees, failing which a franchisee may be entitled to rescind its franchise agreement. When properly invoked, rescission by a franchisee imposes extensive obligations on the franchisor. The Ontario Court of Appeal recently dealt with the issue of whether a notice of rescission of a franchise agreement is valid if it is contained within a pleading.

European Commission's VBER review – what does it mean for franchising?
Fieldfisher LLP
  • European Union
  • 15 September 2020

The EU Vertical Block Exemption Regulation will expire on 31 May 2022 and the European Commission is reviewing its effectiveness to determine whether it should lapse, its duration should be prolonged or it requires revision to take account of market developments since 2010 (most notably with regard to online sales and online platforms). This article explores the process so far and examines what this review means for franchising.

'Special relationship' between franchisors and franchisees: could it give rise to a pre-contractual duty of good faith?
Lapointe Rosenstein Marchand Melançon LLP
  • Canada
  • 14 July 2020

Common law jurisdictions recognise that certain circumstances could arise that would lead contracting parties to have some type of pre-contractual good-faith obligation, including where they have a 'special relationship' – typically characterised by an imbalance of information. A franchise arrangement has been characterised as an example of such a special relationship that could fall within the narrow set of particular requirements for good faith in the pre-contractual context.

When the asterisk is missing: Munich Higher Regional Court's King of the Month decision
Noerr LLP
  • Germany
  • 02 June 2020

Special deals are common among competing burger chains. Although this may be detrimental to franchisees, the Munich Higher Regional Court recently decided that such deals do not infringe antitrust rules. This decision deserves particular attention, as it concerns the common situation of a franchisor using non-binding price recommendations in its advertising and once again clarifies how important the asterisk reference is in such cases.

IP Enterprise Court considers interplay of EU Trade Secrets Directive and breach of confidence for first time
Fieldfisher LLP
  • United Kingdom
  • 02 June 2020

The IP Enterprise Court recently considered the impact of the EU Trade Secrets Directive on the law of breach of confidence – in particular, in the context of ex-employees who sought to franchise their services. The case confirms the limited impact of the directive on the pre-existing law on breach of confidence. However, it also indicates that the directive can be useful in helping to tease out the distinctions between confidential and non-confidential information.

Can good faith require parties to help each other properly exercise their rights?
Lapointe Rosenstein Marchand Melançon LLP
  • Canada
  • 12 May 2020

It is well known that franchisors have been facing increasing pressure to conduct themselves in accordance with the principles of good faith. A recent Ontario Superior Court case has led to questions with respect to a franchisor's duty to protect its franchisee's right to operate in circumstances where the franchisor is the gatekeeper of rights with respect to a third party. In its decision, the court navigated the duty of good faith owed in respect of the renewal of a head lease between a franchisor and a landlord.

COVID-19 Weekly Report (4-10 May 2020)
International Law Office
  • International
  • 11 May 2020

The impact of COVID-19 is being felt in almost every work area across the globe. In order to keep readers abreast of this evolving situation, ILO's COVID-19 Weekly Report provides insight into the major legal developments of the past seven days, as well as a round-up of our panel of experienced international legal commentators' legislative and regulatory guidance.

Proposed changes to insolvency regime and what they mean for franchisors and suppliers
Fieldfisher LLP
  • United Kingdom
  • 05 May 2020

In response to the COVID-19 crisis, the government has stated that new tools will be added to the UK insolvency framework, including a moratorium for companies to give them "breathing space from creditors enforcing their debts while they seek a rescue or restructure". The government is also expected to introduce a moratorium provision, introduce an exclusion of ipso facto clauses and suspend temporarily wrongful trading provisions. This article considers what the changes would mean for franchisors.

COVID-19 Weekly Report (27 April-3 May 2020)
International Law Office
  • International
  • 04 May 2020

The impact of COVID-19 is being felt in almost every work area across the globe. In order to keep readers abreast of this evolving situation, ILO's COVID-19 Weekly Report provides insight into the major legal developments of the past seven days, as well as a round-up of our panel of experienced international legal commentators' legislative and regulatory guidance.

COVID-19 and the franchise landscape
Lapointe Rosenstein Marchand Melançon LLP
  • Canada
  • 28 April 2020

While some franchised businesses have transitioned to working remotely and have ramped up their e-commerce business models in light of the COVID-19 pandemic, the vast majority of traditional franchised businesses are in a precarious state due to a drastic reduction in revenues and uncertain economic conditions for the foreseeable future. This article sets our practical tips and considerations for franchisors and franchisees with respect to navigating COVID-19.

Retention of title – how can franchisors and suppliers best protect claims against insolvent companies?
Fieldfisher LLP
  • United Kingdom
  • 28 April 2020

In the wake of the economic turmoil caused by the COVID-19 crisis, a number of high-profile brands in the leisure and hospitality sectors have entered or will soon enter into formal insolvency processes. Although failure rates among franchises are typically lower than among non-franchised businesses, franchising will not be immune to this trend. It is therefore important that franchisors and suppliers ensure that they have the contractual rights to act quickly and effectively if the need arises.

Recent changes to IP licensing provisions – what franchisors need to know
Fieldfisher LLP
  • United Kingdom
  • 21 April 2020

In 2019 the new EU Trademarks Directive was implemented in the United Kingdom. As part of this implementation, numerous changes were made to the licensing provisions of the Trademarks Act. This article sets out the changes which are most significant for franchisors, including limited direct enforcement rights for non-exclusive licensees and enhanced direct enforcement rights for exclusive licensees.

COVID-19 Weekly Report (30 March-5 April 2020)
International Law Office
  • International
  • 07 April 2020

The impact of COVID-19 is being felt in almost every work area across the globe. In order to keep readers abreast of this evolving situation, ILO's COVID-19 Weekly Report provides insight into the major legal developments of the past seven days, as well as a round-up of our panel of expert international legal commentators' legislative and regulatory guidance.

COVID-19: how franchise and distribution networks can respond
Fieldfisher LLP
  • United Kingdom
  • 31 March 2020

There is no one-size-fits-all plan for how businesses should respond to the COVID-19 crisis. However, this article provides some guidance for businesses which are primarily consumer focused and use franchise and distribution networks to sell their products and services in order to help them to respond to the challenges ahead and hopefully even emerge on a stronger footing than before.

Franchisees cannot be classified as employees
Aramis Law Firm
  • France
  • 24 March 2020

Some jurisdictions have recently held that certain independent workers (eg, Uber drivers) are actually classified as employees. This raises the question of whether franchisees should also be classified as employees. However, as opposed to a Court of Cassation decision which classified an Uber driver as an employee, a recent decision from the Limoges Court of Appeal seems to clarify that a franchisee cannot be classified as an employee due to the specific features of any franchise contract.

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