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FTC Raises Exemption Thresholds

By Joe Fittante

Those franchisors who rely on exemptions from the disclosure requirements of the Amended FTC Rule to complete franchise transactions should be aware that effective July 1, 2020, it became a bit harder to meet the sophisticated franchisee exemption and the large investment exemption, but a bit easier to meet the required payments exemption.

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FPRs in the Time of COVID-19 - You May Be Required to Amend Your FDD - NOW

Charles Modell

Although most franchisors have only recently completed their franchise renewals for 2020, and a few may still even be waiting on a few state approvals, the North American Securities Administrators Association has issued “Guidance” to franchise examiners, franchisors, and franchise practitioners, suggesting that many franchisors may need to immediately update Item 19 of their 2020 Franchise Disclosure Document. You can find a summary of the key points and a link to the entire press release here.

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Supporting the Franchise System During the Next Phase of the Pandemic

By Susan Tegt and Joe Fittante

Many local communities and states have started lifting COVID-19 stay-at-home orders allowing businesses to reopen, while others are requiring businesses to once again shutter their doors. Our franchise team is busy providing guidance to our franchisor clients on how they can assist their franchisees with reopening and how they can best support franchisees located in hotspot communities potentially facing another round of business closures. This article summarizes some of the ways a franchisor can support its system during this next phase of the pandemic—support which should be balanced by providing general guidance that is not specific to any particular franchised location. Franchisees should be reminded that all guidance is provided with the understanding that franchisees are individually obligated to comply with all local, state and federal laws.

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Business Interruption Insurance Coverage: Report Your Claims 

By Henry Pfutzenreuter

Franchises are struggling from losses caused by the COVID-19 pandemic, government orders, and civil unrest. Franchisees face these risks directly, but the entire system is impacted by lost revenue streams caused by widespread business interruptions. Franchisors and franchisees should review their insurance policies to determine whether they have coverage for such losses. Even when exclusions might appear to apply, it is better to err on the side of notifying insurers of losses and to consult with counsel about reporting the facts that support coverage, in order to maximize the likelihood of recovery.

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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. 



Special COVID-19 Issue
July 1, 2020

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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.