Item 15: Obligation to Participate in the Actual Operation of the Franchise Business Item 15 of the amended Rule requires franchisors to disclose whether franchisees are required to participate personally in the direct operation of the franchise. Among other things, the amended Rule’s Item 15 calls for disclosures stating: any obligation for the franchisee to…
The employer must review the employment application carefully. In order to determine whether all the questions asked are appropriate, consider whether the information requested is reasonably related to the job for which the applicant is applying. For example, does the employer really need to know whether an applicant for a custodian position has a driver’s…
Background of Minnesota Mechanic’s Lien Law In Minnesota a mechanic’s lien can be filed by a contractor or materialman to preserve their legal remedy for non-payment by a property owner. This legal process acts as insurance so that the provider of service will be paid. It is effectively putting a “hold” or lien on the…
Item 11: Franchisor’s Assistance, Advertising, Computer Systems, and Training Consistent with the UFOC Guidelines, Item 11 of the amended Rule requires the disclosure of the franchisor’s obligations under the franchise agreement to furnish assistance to franchisees. The disclosure requirements encompass pre-opening assistance (e.g., site selection), as well as any ongoing assistance, such as advertising and…
Independent Contractors This post is part of a series of posts on common issues Minnesota employers face. Persons who follow an independent trade, business or profession in which they offer their services to the general public usually are considered independent contractors and not employees. However, whether such persons are employees or independent contractors depends on…
Statutory Employees This post is part of a series of posts on common issues Minnesota employers face. Even if a worker is not an employee under common law rules, he or she may be considered an employee for certain statutory purposes, such as FICA (Social Security and Medicare) tax, federal and state unemployment insurance taxes,…
When an employee leaves to compete with an employer, employer’s have a number of legal rights and options. The Problem: Employees Leave and then Compete with Their Former Employer One problem many employers face is employees who leave the company and then compete with the employer. Typically, a valuable employee will think to herself, “I…
Brian Roberts, CEO of Comcast Corporation, has agreed to pay a $500,000 penalty to settle claims asserted by the Federal Trade Commission (FTC) that he violated the reporting requirements of the Hart-Scott-Rodino Antitrust Improvements Act (HSR-Act) by failing to report his acquisition of Comcast stock as part of the company’s merger with AT&T Corporation back…
Our office recently received a physical scam letter from Mrs. Tracy Gold. The fraudulent letter claims that Mrs. Tracy Gold was directed to contact our office in order to settle a loan owed to Mrs. Hillary Higgins Green. The scam letter came with fraudulent cashiers check in the amount of $145,500. Click here for more…
Item 5: Initial Fees Consistent with the UFOC Guidelines, Item 5 of the amended Rule requires the disclosure of any initial fees and any conditions on their refundability. “Initial fees” means “all fees and payments, or commitments to pay, for services or goods received from the franchisor or any affiliate before the franchisee’s business opens,…
This post is part of a series of posts designed to help you acquire a loan for your small business. The following posts cover methods for public financing of your small business Local MN Programs for Small Business Loans Minnesota Reservist and Veteran Business Loan Program Minnesota Small Business Loans: Urban Initiative Program Value-Added Producer…
Item 3: Litigation Item 3 calls for the disclosure of certain lawsuits involving the franchisor and other entities associated with the franchisor – i.e., predecessors, parents, and affiliates – in addition to certain lawsuits involving any person identified in Item 2. These are substantially similar to the disclosure requirements of the original Rule and the…
Loan Packaging Before inquiring about debt financing, an entrepreneur should assess such things as: Do you actually need more capital or can you manage existing cash flow more efficiently? How do you define your need? Do you need money to expand or as a cushion against risk? How urgent is your need? Do you want…
Item 1: The Franchisor And Any Parents, Predecessors, And Affiliates Item 1 of the amended Rule requires franchisors to disclose background information on the franchisor and any parents, predecessors, and affiliates. Unlike the UFOC Guidelines instructions for Item 1, the amended Rule does not expressly require a franchisor to refer to itself as “we,” or…
Copyright Protection A third type of intellectual property is the copyright. A copyright protects literary and artistic “expression” as well as other types of informative media that derive their value from the particular manner in which the information is expressed. Books, musical works, plays, computer programs, paintings, sculptures, and movies are among the types of…
I have heard from a number of attorneys that scam artists are targeting lawyers claiming to need legal help. I have decided to posts these email messages here in case other attorneys receive them and wonder whether they are legitimate. There may be similar scams preying on other professions and businesses. How Does the Scam…
At What Point in The Sales Process Must a Franchisor Furnish The Disclosure Document? The amended Rule provides that franchisors must furnish prospective franchisees with a disclosure document at least 14 calendar days before the prospective franchisee signs a binding agreement with, or makes any payment to, the franchisor or an affiliate in connection with…
Small Business Exemption From Rules Minn. Stat. 14.127 provides a procedure for small businesses or small cities to claim exemption from certain state rules. Under the statute, an agency must determine if the cost of complying with a proposed rule in the first year after the rule will take effect will exceed $25,000 for a…
Air Pollution Control Requirements Minnesota businesses must comply with MPCA rules to protect air quality. Some rules apply even though the business will not have air emissions requiring permits. Motor Vehicle Emission Controls Owners of businesses that operate motor vehicle fleets should be aware that it is contrary to state rules and federal regulations to…
State Disposal System Permits State disposal system permits are required for disposal of wastewater other than to surface waters, including large septic tank and drainfield systems and spray irrigation of wastewater. The need for an SDS permit may be satisfied by certain construction or operating practices; these must be evaluated on a case-by-case basis. Only…
Large Franchise Investment Exemption The amended Rule exempts franchise offers and sales where the initial investment is atleast $1 million, excluding the cost of unimproved land and any franchisor (or affiliate)financing. In addition, the prospective franchisee must sign an acknowledgment that thefranchise sale is exempt from the Franchise Rule because the prospective franchisee will bemaking…
Storage Tanks Tank owners are required to register their tanks with the MPCA. Owners of regulated underground storage tanks (USTs) and above ground storage tanks (ASTs) must report information such as tank age, size, and contents within 30 days after installation of a new tank, or within 30 days after any changes in tank ownership,…
Business Licenses And Permits In General The startup, operation or expansion of a business in Minnesota may involve securing one or more business, occupational or environmental licenses or permits. Those licenses and permits fall into a number of categorical groupings according to purpose: Licenses and permits to ensure the competency of practitioners of a business,…
Definition of Franchising Franchising is a method of marketing and distributing goods and services. Franchises are offered and sold for many types of businesses, including services, retail trade, finance, real estate, transportation, and communications. A franchise is broadly defined as a contract or agreement between two or more persons by which the franchisor (the seller),…
A company selling securities to residents of the state of Minnesota must comply with federal and state securities laws. State securities laws are collectively and individually referred to as “Blue Sky Laws.” These Blue Sky Laws vary among the states, sometimes to a significant degree. It is important to note that the Minnesota Legislature recently…
ITEM 17: THE FRANCHISE RELATIONSHIP This table lists certain important provisions of the franchise and related agreements. You should read these provisions in the agreements attached to this disclosure document. Provision Section in franchise or other agreement Summary a. Length of the franchise term Section 1 (also Section 1 of Lease) Term is equal to…
Introduction Here is a sample cover page of a franchise disclosure document. Franchise Disclosure Document Belmont Mufflers, Inc. A Minnesota Corporation 111 First Street Jackson, Minnesota 55000 (111) 222-3333 franchiseofficer@belmont_mufflers4u.com www.belmont_mufflers4u.com Belmont Mufflers, Inc., repairs and installs motor vehicle exhaust systems. The total investment necessary to begin operation of a Belmont Mufflers franchise is $100,000….
Sample Item 19-1: Financial Performance Representation (Based on Actual Historical Performance Results) ITEM 19: FINANCIAL PERFORMANCE REPRESENTATION The FTC’s Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included…
Sample Item 21-1: Financial Statements ITEM 21: FINANCIAL STATEMENTS Attached to this disclosure document as Exhibit J are our audited, fiscal year end financials for 2005, 2006, and 2007. Attached to this disclosure document as Exhibit K are the audited, fiscal year end financials for 2005, 2006, and 2007 of subfranchisor Richard McDonald. Sample Item…
ITEM 13: TRADEMARKS We grant you the right to operate a shop under the name “Belmont Muffler Shop.” You may also use our other current or future trademarks to operate your shop. By “trademark,” we mean trade names, trademarks, service marks, and logos used to identify your shop. W e registered the trademark on the…