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Tips for a Seamless 2022 Renewal Season


By Joe Fittante

As we turn the page from 2021 to 2022 we turn our attention to the upcoming franchise renewal season. To say the least, 2021 was a challenging but productive time in franchising that continued well after the “busy season” of annual renewals. From the introduction of new concepts to the restructuring of existing ones, May through December saw our franchise team working with various franchisors to file numerous initial registrations and amendment applications. Those experiences resulted in some lessons we thought we would pass along to you in hopes of making your renewal process a bit more seamless.

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NASAA’s Recent Proposed Statement of Policy Signals Changes Are Likely Coming (or Here) Regarding Franchisors’ Use of Questionnaires and Acknowledgments

By Max Schott, II

On December 6, 2021, the North American Securities Administrators Association, Inc. (“NASAA”), released for public comment a proposed Statement of Policy regarding the use of Franchise Questionnaires and Acknowledgments. For decades, most franchisors have used some form of Questionnaires or Acknowledgments to help ensure no violations have occurred in the franchise sales process and no financial performance representations have been provided outside of Item 19 of the FDD. While it is unclear when NASAA will release a final version of the proposed Statement of Policy, and after that, how soon and how many of the franchise registration states will formally adopt or elect to follow it, we are already seeing some state franchise examiners requiring compliance with all or a portion of it. This is definitely an issue franchisors will want to review as part of their 2022 renewals.

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Larkin Hoffman Enforces Noncompete in Colorado Federal Court

By Susan Tegt

Covenants not to compete are generally disfavored by courts since they can be viewed as a partial restraint on trade and can limit an individual’s ability to earn a living. These clauses, however, are important to franchisors who expend a great deal of time and money training franchisees on how to operate their franchised business and provide franchisees with confidential information about the franchise system. The Larkin Hoffman franchise litigation team, led by Susan Tegt, recently successfully enforced a post-term covenant not to compete in a franchise agreement between The Bar Method, a fitness studio franchise, and a former franchisee who opened a competitive fitness studio at the same location as the former franchised studio.

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News 

Larkin Hoffman was named a “Best Law Firm” by U.S. News – Best Lawyers for 2022. The Firm’s franchise and land use practices again received national recognition and were ranked in the first tier regionally. Eight of the firm’s other practices were ranked in regional categories, including construction law, real estate litigation, environmental law, eminent domain and condemnation law, land use and zoning litigation, tax litigation, tax law, and municipal law. The rankings are based on a rigorous evaluation process that includes thousands of clients, highly skilled lawyers, and law firm representatives.

Chuck Modell, Joe Fittante, Jim Susag, Max Schott, II and Sawan Patel were listed in The Who’s Who Legal: Franchise 2021. The list is made up of franchise attorneys identified through comprehensive and independent surveys of peers in both general counsel and private practice positions worldwide. By receiving this honor, these five Larkin Hoffman attorneys are recognized among six hundred of the leading franchise lawyers in the world.

Sawan has been selected to serve as the Young Lawyers Division (YLD) Liaison to the Governing Committee of the ABA Forum on Franchising. The YLD increases young lawyers’ involvement in Forum activities and places them on the pathways to leadership.

Max was an intensive program presenter on the topic of “Managing a Franchise Disclosure and Registration Practice in an Increasingly Digital Age” at the 44th Annual Meeting of the American Bar Association’s Forum on Franchising in Atlanta, Georgia.

Max is also one of three authors of the chapter titled “Franchise Disclosure and Sales Compliance” in the ABA Forum on Franchising’s recently published Franchise Law Compliance Manual, Third Edition.



Community Service

Larkin Hoffman’s employees held their Annual Bake Sale fundraiser on December 7, 2021. The proceeds from the Annual Bake Sale went to two local charities: Volunteers Enlisted to Assist People (VEAP) and the Santa Cop Program. VEAP is a basic needs and social services organization whose programs promote access to healthy foods, stable housing and other supportive services. Each year, the Santa Cop Program selects twenty Bloomington children who have experienced trauma or are low income, partner them with a Bloomington Police officer, and provide them with funds to go holiday shopping for themselves and their families.

Late last year, Joe Fittante served as a member of the judging panel for Scott County’s annual FAST-TRACK Business Challenge. Each year, Scott County community members, entrepreneurs, professionals, and students compete to win start-up cash and professional business services designed to fast-track start-up and first-stage businesses. Much like the TV show Shark Tank, participants present their business ideas to a panel of judges, who evaluate them for viability, creativity, need, growth potential, and more. Joe has volunteered his services to assist the winners as they launch their products and services.

Larkin Hoffman was a sponsor of the 2021 Gala for the Benefit of Bridging, which raised more than $470,000. Bridging is the largest non-profit furniture bank in the United States. Serving ‎the greater Twin Cities area, Bridging provides quality, donated furniture and household items to ‎people transitioning out of homelessness, poverty, and other difficult circumstances. Dan Kadlec, ‎a shareholder in Larkin Hoffman’s Corporate and Finance Group, serves as a member of Bridging’s board.‎



Franchising with Larkin Hoffman

If you are interested in franchising your business or would like to know more about franchising, please visit our website for additional information and resources.

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Winter 2022

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Larkin Hoffman provides counsel to a wide variety of ‎organizations, from ‎small businesses and nonprofits to  Fortune 500 companies, in ‎many areas of practice including ‎corporate and governance matters, litigation, real ‎estate, government relations, labor and employment, intellectual property, ‎information technology, ‎franchising and taxation. The firm also serves the needs of individuals in many ‎areas ‎including trusts and estates, personal injury and family law.

 

This newsletter is provided as a service to our clients and firm associates. While the information provided in this newsletter is believed to be accurate, it is general in nature and should not be construed as legal advice.