Business and Tax Lawyer Blog

Despite the still lagging economy, a tiny Riverside bicycle shop in Jacksonville, Florida opened its doors in February of 2010 – and racked up 100 sales and 500 Facebook fans in its first month of operation. While the store, called ZenCog, considers itself a high-tech business, it sells a very old-school product: steel-framed, single speed, coaster-braked bicycles.

Co-owner Garfield Cooper of Avondale, Florida actually attributes the store's success to the poor economy. He says that people can't afford to spend lots of money on their cars, so bikes make a great alternative. And the old-school type of bikes that he sells are inexpensive to maintain since they don't have gears or brake cables.

Co-owner Clark Schaffer of Atlantic Beach, Florida believes that the store's more durable steel frame bikes are the perfect alternative to what he calls "disposable aluminum high-performance bicycles" that cost a lot more to purchase and maintain.

Shaffer and Cooper say they just want to see more people riding bikes; it is great exercise and doesn't pollute the atmosphere. The store has already attracted a fan base of local residents who come by the shop just to hang out.

This is an excellent example of a business finding a niche that can flourish in current economic downturns and recognizing how to "touch" its market segment. Even though their product may be old-school, their business model isn't. The store has embraced social media marketing, with an active website, blog and Facebook page. They use emailed receipts to cut down on paper waste. They also don't carry any new inventory. They use the internet to help customers customize bikes, which the store then assembles for them when the parts arrive. The only bikes they keep on site are consignment and refurbished.

Find out more about Jacksonville, Florida's newest bike shop at New Riverside bicycle shop cruising along despite economy.

Continue reading "New Jacksonville, Florida Small Business Racks Up Sales Offering Perfect Product for Down Economy" »

Any business owner, including franchisees and franchisors, knows how important it is to make the business more visible in order to attract more customers. An effective way to do this is through the use public relations. There are different approaches when it comes to public relations. On one hand, there are a variety of firms that cater to small businesses and franchises.  On the other hand, a savvy owner may follow the advice below to enhance their organization through their own efforts.

Work with news reporters. Instead of simply issuing press releases to the media, take the time to contact a local reporter and find out what they are seeking. If they are interested in a particular subject matter, you might be able to tailor your information accordingly to be more appealing. Not only does this increase the likelihood your information will be published or broadcasted, it also establishes credibility with the reporter and may lead to future opportunities. Also, be sure to learn about the reporter's publication. Reading some articles that they have authored and finding out who their target audience is will enable you to pitch to them more effectively.

Give money. Another way to enhance your business' public image is through donations. Many charitable community events offer special recognition for financial sponsors. In addition to raising awareness for your business, philanthropy also shows you care.

Host events and giveaway prizes. Events such as grand openings or open houses attract great attention from the public. It garners even more attention to have drawings for prizes. This will draw potential customers to your location. If you are not in a position to host an event alone, it may be possible to co-host with another organization.  Split the costs and share the benefit.

Continue reading "Exposure Through Public Relations" »

American Express has announced that they will be acquiring Revolution Money, formerly GratisCard, for a price of around $300 million. Revolution Money is a secure online payment company that was launched two years ago by AOL founder, Steve Case. The company securely authorizes online transactions by using PIN numbers instead of names or account numbers. Account holders can exchange money with each other free of charge. The company is considered a major competitor to PayPal.

American Express has said that they are acquiring the company in order to keep up with cutting edge payment technologies that are evolving in the marketplace. The move is designed to help them extend their leadership beyond traditional payments and into the online payment space. The deal is slated to go through in 2010.

Revolution Money will operate as a unit of American Express, with Revolution Money CEO, Jason Hogg, acting as the new unit’s president and CEO, and Revolution Money Chairman, Ted Leonsis, acting as a special advisor on online payment strategy to American Express. Find out more about the deal at American Express to Buy AOL Co-founder’s Revolution Money.

If you are considering a merger or acquisition, please contact Wood, Atter & Wolf, P.A. for legal counsel.

The Bark ‘n Howl Bakery provides a variety of flavors of dog biscuits for Jacksonville, Florida pets. The non-profit business doesn’t just provide doggie treats though – they provide vocational training and employment for young people with physical and developmental disabilities from Career Frontiers of Northeast Florida.

Leigh Forrester and Martha Sawyer incorporated the business last year and sell their dog treats over the internet at www.barknhowlbakery.com as well as at local farmers’ markets in the Jacksonville area. The two take turns making the biscuits in their own kitchens, and started training the special needs students to help them in February, 2010.

The year-round program is suitable for young adults with Down syndrome, autism, and visual and hearing impairments. The helpers, are from eighteen to thirty five years old and learn a variety of skills, including safety, cooking, weighing, measuring, packaging, computer skills, and even help sell the treats at the farmers’ markets. They will soon be able to learn retail skills as the bakery plans to open a permanent location if they can find a local benefactor to donate the retail space.

The founders say that their goal is to train the students so that they can seek paid employment in Jacksonville and nearby communities. Find out more about this unique business at Dog bakery provides vocational training for special young adults.

If you live in the Jacksonville, Florida or Orlando, Florida area and have a business or employment legal matter, please contact Wood, Atter & Wolf, P.A. for business legal counsel.

Jacksonville based fast food franchise Orange Tree Hot Dogs’ first restaurant was opened in 1968 at the Regency Square Mall by Peter and Carolyn Koppenburger. The family-owned business now has three corporate owned locations, eight franchise locations and is slated to open three more franchises in Florida this year, despite the slowing economy and stiff competition from A&W, Nathan’s Famous Hot Dogs, All American Hot Dogs, Sonic and other chain restaurants that sell frankfurters.

Orange Tree sells over a million hot dogs every year. According to Shawn Emling, co-owner and grandson-in-law of the original owners, “We didn’t reinvent the wheel with the hot dog, we just put a unique twist on it.” The franchise boils their Ball Park brand hot dogs and steams the buns – along with another secret step that makes the taste of their hot dogs one of a kind. They also make six hot dog toppings from scratch.

Emling reports that he eats two or three hot dogs a day; the average American eats fewer, but still puts away sixty per year according to the National Hot Dog and Sausage Council. The new Orange Tree Dog stores will be opening in Gainesville, Daytona Beach, Atlanta and Orlando, Florida and will of course serve the famous Orange Frost Drink along with their signature hot dogs.

Find out more about this story at Orange Tree Hot Dogs: A Jacksonville success story since 1968.

If you live in the Jacksonville, Florida or Orlando, Florida area and have a business law question, please contact Wood Atter & Wolf, P.A. for legal counsel.

The Beaver Street Enterprise Center is a small business incubator that opened its doors in Jacksonville, Florida in 2003. It was established by the nonprofit group, FreshMinistries, to nurture small businesses by providing entrepreneurs with reasonably priced office space, mentoring services and opportunities for networking with other business owners.

In the incubator’s first year, fifteen fledgling businesses provided jobs for sixty two Floridians. By 2007, the center’

s businesses provided almost five hundred jobs to Florida residents, most of them from Jacksonville. The total revenue produced by these businesses has grown to close to $10 million.

Successful businesses to come out of the incubator include A. Harold & Associates, Xeye, Inc., and a Burger King Franchisee who owns six Burger King stores. The University of North Florida’s Small Business Development Center also has a presence there. Most come for the $10 per square foot office rent, but stay for the networking and relationships. Entrepreneurs credit the center with providing them the focus they need to build their businesses, the contacts with other business owners who can provide guidance, and the opportunity to meet local bankers who can help finance their operations.

The Beaver Street Center is currently home to fifteen small business tenants, and has room for two more. The Center also supports fourteen home-based businesses with shared office space, equipment and training. In addition, the Jacksonville Hospitality Institute offers a nine-week course, held in the Center, which prepares students for a career in hotels or restaurants.

Find out more about this small business incubator at Jacksonville small businesses get chance to grow on Beaver Street.

If you live in the Jacksonville, Florida or Orlando, Florida area and run a small business, please contact Wood, Atter & Wolf, P.A. for business legal counsel.

Good news for business owners and those entrepreneurial souls who are looking to start their own business, either from scratch or by acquiring an existing business. It appears that the Recession—the deepest since the Great Depression—is starting to recede. Bouyed by a loan agreement between the European Union and Greece over the weekend, the Dow Jones average closed Monday above the 11,000 mark for the first time in over 1 ½ years! And the Standard & Poor's 500 index closed a point below its own milestone of 1,200. It is expected that major business will report better earnings than expected. In addition, the jobless rate (expected to increase) has remained flat. Out of this Recession, there is an emerging economy of first-time entrepreneurs. Businesses and would-be business owners in Northeast Florida are realizing that now is an opportune time to consider either expanding their current business or starting their own. For those considering such a move, the assistance of Florida business and tax lawyers could prove invaluable, as there are many factors to consider and, once a decision is make, there are multiple moving parts to a successful transaction. These range from properly pricing the acquisition (which includes the valuation of an existing business) to obtaining proper permits and licenses, insurance, and the protection of intellectual property, such as trademarks.

To speak with a Jacksonville business and tax attorney about starting up a business, please contact Wood, Atter & Wolf, P.A. to set up a consultation.

Recently, the Small Business Administration has proposed a new rule pertaining to the Business Development Program, which is intended to help underrepresented and disadvantaged small businesses obtain more opportunities to compete for federal contracts.

A study by the SBA found that women-owned small businesses in particular were unequally represented in 83 industries such as software publishing and wireless telecommunications carriers. Under the new rule, certain government contracts will be set-aside for WOSBs.

Under this proposed plan, businesses must first be certified to be eligible to compete for the set-aside contracts. To be certified, a business must be more than half owned by women and must be primarily managed by women. Also, the new rule has abolished the requirement that businesses demonstrate past discrimination to become certified. In addition, WOSBs will be able to receive certification from a third party or may self certify.

Law makers are accepting public comments on the proposed ruled until May 3, 2010 either at this web address or by mail to Dean Koppel, Assistant Director, Office of Policy and Research, Office of Government Contracting, U.S. Small Business Administration, 409 3^rd St. SW, Washington, D.C 204156, reference RIN 3245-AG06.

Florida businesses, take heed: you must give the public notice of your fictitious name! Here is the notice on the Florida Department of State's home page:

NEW LAW! Effective July 1, 2009, the intention to register a fictitious name must be advertised at least once in a newspaper in the county in which the principal place of business will be located. Contact your newspaper for advertising information.

What does this mean? As of July 1, 2009, you will be required to advertise your intent to register your Fictitious Name. Under the Fictitious Name Act (F.S. Title 46 Ch. 865.09), all persons transacting business under any name other than their legal name is required to register this fictitious name. However, actively licensed attorneys and those persons licensed by the Department of Business and Professional Regulation and the Department of Health are not subject to this requirement if it is for the purpose of practicing their licensed profession. Also, any commercial entity, corporation, partnership that is actively registered with the Department of State is exempt from registration under the Fictitious Name Act.

Complying with the new law is easy. A person wishing to register a Fictitious Name need only to advertise the intention to register the name in a newspaper at least once in the county where the principle place of business of the applicant will be located. No proof of advertisement is necessary; the applicant will only be ask to certify that he or she has complied with the advertisement requirement. The applicant can then register the Fictitious Name and pay the registration fees online at www.sunbiz.org. Registration is valid for five years unless the business changes owners or the owner wishes to cancel the registration. Re-registrations, Cancellations and Renewals cannot be filed online; the forms must be filed by mailing them along with the appropriate fees to the Division of Corporations.

Failure to comply with the registration requirement is a misdemeanor of the second degree and is punishable as such (F.S Title 46 Ch. 775.082 or 775.083). Additionally, if a business fails to comply with registration, the business, its members, and those interested in doing such business may not maintain any action, suit, or proceeding in any court in Florida arising out of the transaction of business by such a business until they have complied with the registration requirement. Further questions can be answered by attorneys familiar with Florida business law.

NASA chief Charles Bolden has announced that he will actively try to attract commercial space operators to Cape Canaveral. The so-called "space taxis" would be able to take advantage of the processing and launch facilities already in place in Florida's Kennedy Space Center. Bolden said his pitch to the commercial enterprises would be that they could save money and time by using existing infrastructure instead of building their own. He also indicated that NASA would help commercial operators modify existing infrastructure for their needs.

Kennedy Space Center director, Robert Cabana, has already said that NASA will begin upgrading its existing facilities in order to attract a private space company. The Constellation Moon project was originally slated to use the center's vehicle assembly building, hangars, and cargo bays, but the new budget constraints have prompted NASA to cut the program, leaving those assets unused. The same budget is allowing NASA to spend two billion dollars over five years to modernize the facilities.

The announcement may be good news for Florida workers employed at the space center, who were likely to lose their jobs when the space shuttle program is retired later this year. It will also be good for Florida's economy to attract large businesses to the area. Find out more about this story at Bolden: Florida should be home of private spaceflight.

If you live in the Jacksonville, Florida or Orlando, Florida area and have a business legal matter, please contact our firm, Wood, Atter & Wolf, P.A., for business legal counsel.

Congratulations to Metro Diner, a local restaurant in the historic San Marco neighborhood in Jacksonville, Florida! They have registered three trademarks with the State of Florida: their name, their logo, and their slogan, "Where The Locals Eat."

The logo, as you can see, is in the signature dark and light green colors. Their slogan is very apropos to their typical customers who crowd the diner for breakfast and lunch.

Protect your business identity--register your trademarks today. Contact a trademark and business attorney to help you through the process.

One of the biggest misconceptions is that an idea can be patented. Even a Yahoo or Google search about patenting an idea will lead people to believe that this is the case. Often, I will have a creative mind book a consultation with me to discuss patenting an idea for an invention. Truth be told, their ideas usually are very good ones. However, they have no idea how to make or build this invention. For example, if someone told me that a great invention would be a machine that would stop world hunger. Although it's a fantastic idea, unless this inventor knows how to build one, there is no patentable subject matter.

Building a business so successful that others want to emulate it is the ultimate American Dream. However, going big has its restrictions. Even without formally calling it a "franchise relationship," if the arrangement walks like a franchise, and talks like a franchise, chances are....

The Federal Trade Commission (FTC) defines a commercial relationship to be a franchise when:

(1) the franchisee is permitted to use the franchisor's trademarks;

(2) the franchisor has the ongoing right to control significant aspects of the franchisee's operation; and

(3) as a condition to continue this relationship, the franchisee pays the franchisor.

When a business relationship falls under this franchise relationship, the FTC requires that the franchisor discloses specific information to the franchisee. The items to be disclosed are outlined in 16 CFR 436.

The Federal Trade Commission requires that a franchisor provides potential franchisees with Franchise Disclosure Documents compliant with 16 CFR 436 at least 14 calendar-days before the prospective franchisee signs a binding agreement with, or makes any payment to, the franchisor.

The itemized list of information franchisors are required to disclose to potential franchisees are:

1. The Franchisor and any Parents, Predecessors, and Affiliates

2. Business Experience

3. Litigation

4. Bankruptcy

5. Initial Fees

6. Other Fees

7. Estimated Initial Investment

8. Restrictions on Sources of Products and Services

9. Franchisee's Obligations

10. Financing

11. Franchisor's Assistance, Advertising, Computer Systems, and Training

12. Territory

13. Trademarks

14. Patents, Copyrights, and Proprietary Information

15. Obligation to Participate in the Actual Operation of the Franchise Business

16. Restrictions on What the Franchisee May Sell

17. Renewal, Termination, Transfer, and Dispute Resolution

18. Public Figures

19. Financial Performance Representations

20. Outlets and Franchisee Information

21. Financial Statements

22. Contracts

23. Receipts

Exhibits

A. Franchise Agreement

For help preparing or reviewing these documents, contact an attorney who is familiar with Franchise Disclosure Documents and Franchise Agreements.

So your business is successful. You have a proven business model with effective marketing and distribution systems in place. You are producing profits and steadily capturing market share. Yet, you ask yourself, "How can I take my operation to the next level?"

On the other hand, you may be trying to start up a business, but be tired of re-inventing the wheel. You want to own your own business, but don't know what policies and procedures to implement. You wonder, "Isn't there an easier way to improve my chances of success?"

Franchising can sometimes be the fitting solution. A franchise is a relationship between a franchisor and a franchisee. Franchisors are those who seek to expand their reach beyond a local or regionalized market. Franchisees are the ones who get access to an established brand, a proven business model, and marketing and supply support. In exchange, the franchisor collects a front-end fee, ongoing royalties, and the ability to increase brand recognition and market share on a larger scale.

Entering into this relationship, either as a franchisor or franchisee, has many legal implications. The documentation, including the franchise agreement and the disclosure documents (regulated by the Federal Trade Commision). Whether starting a franchise or buying into one, talk to a franchise attorney about these important documents.

Arguably the most versatile of the forms, the LLC is somewhat of a hybrid, in it allows for the management flexibility of a general partnership, but features the limited liability of a limited partnership. LLCs can be member-managed or manager-managed and no personal liability on behalf of the entity attaches. LLCs are taxed either pass-through or as a corporate entity. Florida requires the filing of articles of organization for LLCs.

The advantages of an LLC include: no shareholders, the option to operate like a partnership or elect one managing member, no personal liability for any of the members, and the option to choose tax treatment.

A "C" Corporation requires the issuance of shares and the election of a board of directors. There is no personal liability incurred by the shareholders, directors, or officers for actions by the corporation. "C" Corporations are subject to double taxation, since the corporate entity pays taxes on its income, and dividends to shareholders are also taxed. To form a "C" Corporation, a multitude of state filing formalities are involved.

The advantages of a "C" Corporation are: the ability to raise large sums of capital, management begins with the shareholders who select directors who then choose officers, and no personal liability. The disadvantages associated with a "C" Corporation are double taxation, articles of incorporation must be filed with the state and statutory rules of operation.

A "S" Corporation is the same as a "C" Corporation except that is gets "pass through" tax treatment. Formalities are generally the same as a "C" Corporation but there are additional criteria limitations such as the number of shareholders, and citizenship requirements.

LLPs allow for all of the partners to share in management, and in case liability arises (for malpractice or negligence only), the offending partner is personally liable. Just like any other partnership, LLPs have pass-through taxation. Forming an LLP requires a certified registration.

The advantages of the LLP are: all partners can participate in the management of the company, no personal liability on any of the individuals (with the exception of malpractice or negligence), and taxation passes through to the individual.

The disadvantage of the LLP is the mandatory state registration.

In a limited partnership, there are two classes of partners: general and limited.

The general partner is the one who runs and manages the business, oversees the day-to-day operations, and incurs personal liability on behalf of the partnership. The limited partner is simply a silent investor who typically has no management functions, and is liable on behalf of the partnership only to the extent of the amounts of money invested.

A limited partnership also features "pass through" tax treatment. For a limited partnership, a certificate of limited partnership must be filed. Limited partnerships can also be formed with a corporate general partner. What this means is that the partnership can be formed between an individual and a corporate entity. When in this form, Florida law allows the limited partners to engage in management, but by engaging in management, the limited partners incur personal liability. When a partnership involves a corporate general partner, a certificate of registration must be filed with the state.

The advantage of a Limited Partnership is that there is no liability to the limited partners for financial shortages outside of initial principal.

The disadvantages of a Limited Partnership are that the general partner is liable for any financial shortages outside of the initial principal, and the general partner bears all the risk but no liability beyond his own assets.

In a general partnership, agency theory applies wherein each of the partners can bind the entire partnership. Each partner also incurs personal liability, but benefits from what is termed "pass through" tax treatment. "Pass through" tax treatment means that although the partnership files an information sheet with the state, income passes through the entity and is taxed via each partner's individual tax return. A partnership requires some form of an agreement (in writing or oral) but this document does not have to be filed with the state.

The advantages of general partnerships include: no individual liability, taxation passes through to the individual and the entity itself is not taxed, flexibility to expand the scope of the business, the ability to spread losses, and no filing formalities involved.

The disadvantages are that the you may be liable for others, management control is divided, and others can speak for you and bind the partnership.

The sole proprietorship is owner-managed and is suitable for a single-owner/employee enterprise. The owner/employee faces total personal liability but is taxed personally via their individual income tax return. Although there are no structural formalities within a sole proprietorship, the name of the operation should be registered with the state.

The advantages of Sole Proprietorship are low start up costs, no double taxation (i.e. taxing the individual and the business), no liability for others, no profit sharing, and complete control over operations.

The disadvantages of Sole Proprietorships are that the owner incurs personal liability and can be thin on management.

Before registering a business, every new business owner is confronted with the task of deciding what business form/entity to use.

Well, the basic common business forms come in 6 flavors. They are the sole proprietorship, the general partnership, limited partnership, limited liability partnership (LLP), limited liability company (LLC), and the Corporation.

This is the first in a seven-part series, where I will provide a brief introduction to the options that best suits a business owner's needs.

I recently presented my seminar, "From Emblems to Empires: Using Trademarks to Promote, Protect, and Produce Business." The audience were the members of IMPACTJax, a young professionals' group that is part of the Jacksonville Regional Chamber of Commerce.

I discussed the importance of promoting a business name by building a brand name. The goodwill and reputation should then be protected through trademark or patent registration. Only then can defensive and offensive strategies have any teeth against potential infringers. Once a business achieves a level of success with those trademarked or patented assets, I explain why franchising the operation is among other options for expanding the business. In the alternative, for entrepreneurs interested in minimizing the risk of owning a business, I also discuss the advantages of buying a franchise.

Couldn't make it to the original presentation? Contact me to see when this seminar will be presented at a venue near you.