As a franchisee, you no doubt appreciate the value that a strong brand can bring to the table. In fact, brand recognition is one of the top reasons why many people choose to buy a franchise instead of starting an independent business. With approximately 27.5 million viewers having tuned in daily to watch the 2016 Rio Olympics on U.S. broadcast television and online streaming, you may be thinking about cashing in on the Olympics’ brand value in 2020. But, the question is, can you? The Olympic Trademarks Like other famous brands – including NFL, Super Bowl, NCAA, Final Four – “Olympic” is a registered trademark. The United States Olympic Committee (USOC) owns the registration with the United States Patent and Trademark Office (USPTO), and this means that using “Olympic” (or any confusingly-similar trademark) for commercial purposes requires a license from the USOC. Like other major sports organizations and other famous brand owners, the USOC makes money (lots of money) from licensing its trademark, and as a result it has been known to vigorously pursue businesses that attempt to benefit from associating themselves with the Olympics without acquiring a license. What about the Olympic rings? As you might have guessed, those are protected, too. A trademark can be a word or symbol (or a combination of both), and using the Olympic rings in your business without authorization could also very well lead to the USOC sending a cease-and-desist letter. In fact, not only are the Olympic trademarks protected by federal registrations, […]

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When comparing different franchise opportunities, there are several factors that come into play. Brand recognition, royalty rates, training, the initial investment – these are all issues that, for most prospective franchisees, are top of mind. But, there is another issue that can be just as important as these (if not more), and that also serves to differentiate certain franchisors from others. This is the issue of mandatory arbitration. While you may not be concerned about getting into a dispute with your franchisor right now, what your franchise agreement says about arbitration can be critical to understanding – and protecting – your rights should a dispute arise down the line. What is Mandatory Arbitration? Arbitration is a voluntary form of alternative dispute resolution (ADR) that is intended to provide consenting parties with an efficient and cost-effective way to avoid the burdens of full-blown litigation. In many commercial situations, it will be in both parties’ best interests to acknowledge their differences and work toward a resolution without spending unnecessary time (and money) going to court. But, if arbitration is “voluntary” and designed to save money, why are we talking about “mandatory” arbitration; and, why have we said that arbitration is not necessarily fair for franchisees? If your franchise agreement has an arbitration clause, then you are subject to mandatory arbitration. Essentially, when you signed the agreement, you “voluntarily” agreed to submit all relevant disputes to arbitration regardless of whether it is in your best interests to do so when the time actually […]

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This is Part 3 of our three-part series, Understanding Your Franchisor’s FDD. Here, we cover some of the highlights of Items 15 through 23. For our discussion of Items 1 through 14, you can read: Understanding Your Franchisor’s FDD – Part 1 (Items 1 through 7) Understanding Your Franchisor’s FDD – Part 2 (Items 8 through 14) Item 15: Obligation to Participate in the Actual Operation of the Franchise Business What You’ll Find Any restrictions the franchisor imposes regarding who can take responsibility for the day-to-day operation of the franchised business. Why You Care While some franchisors do not require their franchisees to have direct involvement in their outlets’ day-to-day operations, others do. If your franchisor requires direct, “on-premises” supervision, this is certainly something you will want to know (especially if you are looking for a multi-unit opportunity). Item 16: Restrictions on What the Franchisee May Sell What You’ll Find Any requirements to sell only approved goods or services, as well as any requirements to sell all goods or services authorized for sale at franchised outlets. Why You Care If your franchisor limits your inventory or service offerings, this is something that you will need to take into consideration when evaluating the financial potential of your franchise. Likewise, if your franchisor requires you to carry all approved products, is this going to leave you paying for inventory that just ends up going to waste? Item 17: Renewal, Termination, Transfer, and Dispute Resolution What You’ll Find A table that identifies where […]

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