February 2010

Last summer Franchise & Business Law Group moved its offices from downtown Baltimore to Baltimore County, near the county seat of Towson. This relocation of the firm's office to 1447 York Road provides more space for growth, and the location is close to the offices of other professional advisors as well as the Baltimore Beltway (I-695). Come visit us when you are in the Towson area! Please also note that our new telephone number is 410-583-0099, and our fax number is now 410-583-0033. The telephone numbers that we used in downtown Baltimore will be surrendered by July 1, 2010.

PERSPECTIVES...from the desk of David Cahn

The Importance of Franchisee Selection

As we only begin to emerge from the nation's most difficult economic times since the Great Depression, many franchisors (and their sales representatives) may be tempted to ease their qualifications for new franchise prospects. However, franchise agreements are long-term relationships, and franchisors are investing in their franchisees just as much as their franchisees are investing in them. Franchisors should remain cognizant of these facts and resist compromising long-term growth for short-term cash flow.

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Beware of Condo Litigation!
Harry Rifkin

As a litigator, I deal with situations every day which have, for one reason or another, deteriorated to the point where the parties are in a serious dispute and has often gone to the point of an actual legal proceeding. One area of my practice involves construction litigation which often involves condominium associations in a battle with the condominium builder or developer. These suits are often filed 4 or 5 years after the buildings were constructed and the problems are known to the Council of Unit Owners. The delay in filing the suit is often the first and primary defense of the builder as statutes of limitations typically bar claims asserted more than three years after discovery of the defect.

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Intellectual Property Focus: Copyright Ownership of Architectural Plans and Buildings
Jeffrey S. Fabian

Many businesspeople have misconceptions about copyright ownership in the situation where an independent professional is hired to prepare or design unique and protectable matter for use in the hiring party's business. A common example is the hiring of a design firm to create a company website. Unless you and the design firm expressly agree in writing, the developer will likely own the copyrights for your website. While you retain rights (to the extent that you have them) to any photographs, text or other content that you supply, the developer will own the rights in the overall design of the site. In the best of circumstances, you will share joint ownership with the developer. A written work-for-hire or assignment agreement must be executed in order for you to obtain copyright ownership in materials commissioned from independent parties.

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Area Representative Disclosure Obligations In Flux
David L. Cahn and Jeffrey S. Fabian

The relationships involved in two- and three-tiered, multi-unit franchise expansion models raise difficult compliance questions under the Federal Trade Commission (FTC) Franchise Rule (FTC Rule) and the various state franchise registration and disclosure laws. Failure to properly disclose all parties involved in the franchise sales process, including intermediate parties, can lead to civil liability, fines and cancellation of franchise agreements.

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