Franchise Law Virtual Summit

COVID-19 Liability Threats to Franchising – reopening issues, employment liability & legislation

Hear from Federal policymakers and Alabama Attorney General Steve Marshall about liability challenges facing franchised businesses across the country. While some franchise businesses were deemed essential and have remained open, others have just begun welcoming customers back in the doors, but either way, all are faced with potential liability threats related to COVID-19, whether from employees or consumers. This session will discuss both legal and legislative issues surrounding liability concerns for franchised businesses. 

Moderator:  Jeff Hanscom, State Government Relations & Public Policy, IFA; Steve Marshall, Attorney General, State of Alabama; Congressman Henry Cuellar (D-TX), Congressman, U.S. House of Representatives; Alexandra Cunningham, Partner, Hunton Andrews Kurth LLP

1. Food for Thought:  Managing the World of Third Party Delivery Services
   Last year’s forum introduced the paradigm shift toward third-party delivery services for the restaurant industry. During the beginning of 2020, there were likely still some systems that were preparing for the world of third party delivery services.  COVID-19 has accelerated that process for most systems as restaurants have struggled to deal with emergency measures, mandatory closures, social distancing and other challenges that severely limited or prohibited business operations.  We will continue the discussion this year by examining the following issues from legal and business perspectives:
    •    Determining the goals for your system when considering engaging a third-party aggregator;
   •    How issues relating to data ownership impact future marketing efforts;
   •    Key provisions to consider when negotiating agreements with a third-party aggregator; 
   •    Exploring the recent proliferation of ghost kitchens and its impact on the food-on-demand industry; and
   •    The impact of COVID-19 on third party delivery.
   Speakers:  John Teza, Former Principal, NRD Capital; Amy Cheng, Partner, Cheng Cohen; Dominic Mochrie, Partner, Osler
    
2. Conspiracy Theories:  Establishing Third Party Liability in Franchise Litigation
   Often times the deterioration of a franchise relationship involves more parties than just the franchisor and the franchisee. This session will explore varying forms of third party liability that arise in franchise litigation. The presenters will discuss third party liability for breach of restrictive covenants, tortious interference, civil conspiracy, contributory trademark infringement, and trade secret misappropriation. Experienced litigators will teach us how to establish liability under these theories, ways to defend against such claims, and the tactical and strategic considerations involving third party claims.
   Speakers:  Justin Sallis, Lathrop GPM; Susan Tegt, Larkin Hoffman; Joseph Goode, Laffey Leitner & Goode 
    
3. Item 19 in 2020 - FPRs in the New Decade 
   With the adoption of the 2017 NASAA Franchise Commentary on Financial Performance Representations and 2020 NASAA Guidance on Disclosing Financial Performance Representations in the Time of COVID-19, franchisors are facing greater obstacles in presenting key financial performance data in Item 19.  This session will discuss:
   •Best practices in drafting compliant FPRs, including those for emerging brands and non-traditional locations
   •Common objections from state examiners during the registration process and best practices in crafting effective responses 
   •Issues confronting franchisors and their attorneys in making Item 19 financial performance representations, including the use of FPRs in the franchise sales process
   •Factors to evaluate in determining whether a reasonable basis exists to include an FPR in response to the COVID-19 pandemic
   Moderator:  Joy Ann Kenny, Associate, Fisher Zucker
   Speakers:  Max Staplin, In-House Counsel, Brightway Insurance; Megan Center, Associate, Fox Rothschild; Diana Vilmenay, Attorney & Shareholder, Polsinelli
    
4. Meeting the Challenges of Running an In-House Legal Department in a COVID -19 Environment
   The COVID 19 environment has already changed how in-house legal work is done. The economic impact is likely to be severe.  Use of benchmarking for rates and costs  , allocating work to a lesser number of firms or shifting to lower cost offices , improving ways for teams to work together and  insourcing are just a few of the strategies being used. The question is whether in –house legal departments will return to prior ways of functioning or will they be required to adapt to a different normal and what will that look like ? This panel will take this question on , addressing how their legal departments are meeting the challenge and providing recommendations for the future.
   Moderator:  Kathleen Panek, General Counsel, U.S. Business Holdings, Inc.
   Speakers:  Gail Sharps Myers, General Counsel, Denny’s;  Tina B. Watts, Associate Counsel, Commercial Law, Darden 

Government Relations Update

IFA’s Government Relations team will provide an overview of the federal and state legislative challenges facing the franchise business model in the wake of COVID-19, including liquidity, liability, and employment-related policy matters.

Speakers:  Matt Haller, Senior VP, Government Relations & Public Affairs, IFA; Suzanne Beall, CFE, VP, Government Relations & Public Policy and Counsel, IFA; Jeff Hanscom, VP, State Government Relations & Public Policy, IFA; Michael Layman, VP, Federal Government Relations, IFA

Franchise Regulator Panel: State of Play in the COVID Era

This program will cover a wide range of current issues in franchise registration and disclosure regulation, with practical guidance on state franchise regulatory compliance in the wake of COVID-19.

Speakers:  Suzanne Beall, CFE, VP, Government Relations & Public Policy and Counsel, IFA; Michelle Webster, Senior Financial Legal Examiner, Washington Department of Financial Institutions; Dale Cantone, Assistant Attorney General, Maryland Attorney General's Office; Theresa Leets, Assistant Chief Counsel, California Department of Business Oversight
 

1. Drafting Trends - What's New in Franchise Agreements?
   As franchise arrangements evolve, so should your franchise documentation. This session will explore select provisions in light of current trends.  The program will include:
   •        Private equity acquisitions 
   •        Encroachment
   •        Social media
   •        Third party deliveries 
   •        National accounts
   •        Data breaches
   •        Joint employment
   •        Customer list ownership
   •        Liquidated damages
   •        Anti-poaching
   Moderator:  Thomas Pitegoff, Principal, Offit Kurman Attorneys At Law
   Speakers:  Samuel Wieczorek, Attorney, Cheng Cohen; Dawn Diaz, General Counsel, Sun Holdings 
    
2. Crisis Management in the Era of Fake News
   In the era of instantaneous reporting and less than rigorous fact gathering, how does a franchise system safeguard its hard-earned goodwill and reputation?  This session will examine the role of the lawyer in crisis management, including addressing bad press, protest sites, and customer outrage.  The panelists will also provide advice on:
   •       Preparing for a crisis and weathering the storm once a crisis occurs, and
   •       Managing and responding to "fake news" that is leaked from the system, including attempts to leverage the press to a franchisee's advantage in civil litigation and settlement negotiations, and
   •        Discuss procedural and tactical advice on how to best use the court or private dispute resolution to safeguard and defend one's hard-earned goodwill and reputation
   Moderator:  Bethany Appleby, Member, Appleby & Corcoran, LLC
   Speakers:  John Gessner, Partner - Fox Rothschild LLP; Kathryn Kotel, Interim General Counsel, Smoothie King Franchises, Inc.; Sarah Walters, Of Counsel, DLA Piper
    
3. Privacy Compliance in the Franchise World: Lessons Learned and New Developments
   Franchise systems can start to hone new compliance strategies as best practices begin to emerge from the first eight months of the California Consumer Privacy Act (“CCPA”), effective since January 1, 2020. This session will focus on how privacy law developments in 2020 provide franchise systems with new opportunities (and challenges) in their compliance efforts. We will cover the franchise implications of CCPA litigation and enforcement actions in 2020, new compliance strategies and tools, and the latest privacy law developments.
   Moderator:  Paul Luehr, Partner, Faegre Drinker Biddle & Reath LLP
   Speakers:  Heather Buchta, Partner, Quarles & Brady; Elizabeth Harding, Shareholder, Polsinelli

Balancing Legal Considerations While Developing Diversity, Equity and Inclusion Goals
This program will examine legal considerations in developing system goals related to diversity, equity and inclusion, including the effect of legislation on promoting diversity and balancing free speech in franchise systems with social media sensor.  
Speakers:  Earsa Jackson, Clark Hill Strasburger, Partner; IFA Diversity Institute Board Chair;  
Marlén Cortez-Morris, Barnes Thornburgh, LLP, Partner; IFA Diversity Institute Board Member;
Richard Chapman, Clark Hill Strasburger, Partner