Business and Tax Lawyer Blog

Among the various entries in the Oscars, one was particularly interesting in an intellectual property sense. From the Bentley birds in the sky to the AIM and Bic mascot pedestrians walking in the streets, Logorama consists almost entirely of trademarks and logos. The film won the Academy Award for Best Animated Short Film. A producer, referring to the number of logos, thanked the "3,000 non-official sponsors" used in the film during the acceptance speech.

Logorama begins with two Michelin Man police officers, whose lunches are interrupted by a dispatch to apprehend a fleeing criminal, Ronald McDonald. Intertwined are the stories of two Pringles mascots attempting to flirt with Esso Girl at a Pizza Hut as well as a field trip to the zoo with Big Boy and Haribo. Mr. Clean leads the zoo tour, where the MGM Lion is on display. Plots converge during a shootout at Pizza Hut between McDonald and police. Afterward the city is engulf by a giant X-Box logo and eventually ends with the camera zooming out on a world, then a galaxy, then a universe comprised of logos.

According to the creators, the film shows an "over-marketed world built only from logos" to stress that nearly everything in daily life is associated with a graphic of some sort. The piece also appears to be a social commentary depicting the absurdity of the overuse of trademarks and product placements on the big screen.

Logorama was written and directed by H5, a French animation studio and collective of directors founded in 1996. Specifically, the film was directed by Francois Alaux, Herve de Crecy, and Ludovic Houplain.

This recent Oscar is not the film's first accolade. Logorama has received awards in numerous international film festivals including the 2009 Stockholm International Film Festival (Sweden), the 2009 Vendome Film Festival (France), and Cannes in 2009.

Continue reading "Logorama: A Social Commentary" »

The entry fee for a lifetime membership in the Freedom Boat Club Franchise is $5000. Unfortunately, Jacksonville, Florida residents who paid the membership fee may be out of luck. Last August, Freedom Franchise Sales terminated its contracts with two Jacksonville Florida Boat Club locations; one at Intracoastal Waterway and the other at Julington Creek.

Freedom Franchise then reopened the Julington Creek location under company-owned management. While members are welcome to continue using that location, many members who signed up for the Intracoastal location say that the Julington Creek location is less convenient and does not have the offshore fishing boats that the Intracoastal location offered. The franchise is not offering any refunds to disgruntled members.

As a general rule, consumers have little recourse to get membership fees refunded when a business closes its doors. The one exception to that general rule in Florida would be health clubs; Florida bans lifetime health club memberships, limiting them to three years. The club is also required to post a bond with the state that would be used to reimburse members if the club went out of business.

However, for other types of clubs, potential members need to review the membership contract very carefully before signing. Individuals should not hesitate to ask a club to add language that would allow them to get out of the contract and get their money back if a particular location closes. If written correctly, this added language could provide a contractual claim for reimbursement - confirming the specific amount to be returned to the member on club closure of a specific location and establishing a process to secure the repayment. Of course, if the entire business closes down, it may still be difficult or impossible to get your money back.

A spokesperson for Freedom Franchise Sales says that the company has made a good faith effort to provide boat services to Intracoastal location members. They are currently searching for a second location. Read more about the closing of a Jacksonville, Florida boat club at Left 'high and dry' after paying club fee.

If you live in North Florida and have a business legal matter, please contact Wood, Atter & Wolf, P.A., Jacksonville, Florida business law attorneys.

Logorama, which recently won an Academy Award for Best Animated Short Film, tells a story using between 2,500 and 3,000 logos and trademarks.  It appears that the creators did not get authorization to use the marks for the project. So far, no explicit objections have been made.  The video is currently blocked from at least one website due to a copyright claim by Autour de Minuit, the production company behind Logorama.

Even if brand owners do object, Logorama's creators could have protection under the fair use doctrine.

One purpose of a trademark is to enable consumers to identify the origin of products or services, thereby enabling better buying decisions. Infringement occurs when party B uses party A's registered trademark in a way that causes a likelihood of confusion. In this manner, a customer might mistakenly purchase party B's product, believing party A manufactured it.

Fair use is a defense to trademark infringement where the important question is whether a likelihood of confusion exists. Courts in different jurisdictions analyze the doctrine differently. Some courts, to varying degrees, borrow concepts from copyright law and consider whether the use of an identical or similar mark for parody and/or satire purposes creates a likelihood of confusion. Parody is use of a mark to comment on the original brand owner whereas satire is use of a mark to comment on an unrelated subject. As with copyright issues, some trademark cases distinguish parodies from satires and have held that fair use applies to the former but not the latter. Other jurisdictions stress the likelihood of confusion test regardless of "whether the butt of the joke is society at large, or the trademark owner in particular."

Whether Logorama's use of the marks is a parody or satire is debatable. On one hand, use of the various logos appears to critique society's reliance on name brands and manufactures' reliance on product placement, which  would constitute a satire. One the other hand, some use of the marks is directed at the original brand, likely constituting a parody. According to the jurisdictions drawing a distinction between parody and satire, fair use would more likely apply where the film targets the original brand. Referring back to the basic test of infringement, however, whether the use of any mark is a parody or satire may not be as important when viewed through the prism of likelihood of confusion. The fact that Logorama features so many marks should not contribute to a likelihood of confusion because no single brand stands out to improperly suggest sponsorship or an indication of origin.

Continue reading "Logorama: Trademark Fair Use" »

When considering a franchise purchase, the first thing on most investors' minds is: How much money can I make? Ever since the Federal Trade Commission (FTC) passed the franchise compliance rules of 1979, many franchisors will incorrectly tell prospective owners that they cannot share earnings information.

The FTC regulations specifically allow franchises to make earnings claims as long as they follow the specified rules. The FTC revised the rules again in 2007, and now calls these financial performance representations instead of earnings claims. Even so there are five reasons why a franchise might not disclose financial performance representations to you. They include:

1. They're too new to have a record of unit operations; putting forth numbers would be premature and possibly misleading.

2. They don't feel like investing the time and resources required to compile the data.

3. They don't feel comfortable with the accuracy of the data; this might be due to the way numbers are reported at the franchise level. They would not want to put out numbers that could be challenged as misleading.

4. Their attorney told them not to due to risks of disclosure.

5. The numbers are low and make them look like a bad opportunity for investors.

When a franchise opportunity you are looking into doesn't disclose financial figures, you need to find out why they didn't. If the answer doesn't satisfy you, dig deeper until you are satisfied. Find out more tips for qualifying franchises at The Truth About Franchise Earnings.

If you live in North Florida and are considering buying a franchise, please contact Wood, Atter & Wolf, P.A.

The decision to purchase a franchise involves many factors, but there are ways for you to increase your chances of making the right move. Having a frank conversation with the franchisor is a great place to begin; the following are some tough questions you should get answers to before you make your final decision.

One: Can you give me some specific examples of problems your franchisees have run into and how you helped them? A good franchisor will not be afraid to tell you about problems they have run into and how they learned from them. Listen carefully to see how well they support their franchisees when they run into problems.

Two: What are the personality traits that help people succeed with your franchise, and what are some that get in the way? When you get the answer, honestly evaluate which category you fall into.

Three: Can you tell me some reasons why you might turn down a franchise request? You want to sign on a with a franchisor who has standards for their franchisees. If they don't, that could negatively affect their perception in the marketplace.

Four: Are you currently involved in any lawsuits with franchisees, or have you been in the past? Don't let the answer scare you off; many franchisees and franchisors end up in court for one reason or another. Listen to what the issue was and see if they have taken steps to prevent it from happening in the future.

Five: Are you planning any major upgrades in the near future? Costs for technology or equipment upgrades may be your responsibility.

Remember, the franchisor may not be at liberty to answer all of these questions, but the more you can find out before writing your first check, the better. Read more franchising tips at 5 Great Questions To Ask Franchise Company Executives Before Buying A Franchise.

If you live in the Jacksonville, Florida or Orlando, Florida area and are considering purchasing a franchise, please contactWood, Atter & Wolf, P.A. for business law counsel.

Nimnicht Chevrolet of Jacksonville, Florida was one made of the country’s first GM Hummer franchises in 2002. The dealership built a multi-million dollar dealership for the brand, which included an off-road test drive course. But times have changed. Consumers are less interested in paying between thirty and forty five thousand dollars for an SUV that gets from thirteen to eighteen miles per gallon.

GM has recently had to shut down Hummer 2 production, and has been looking for a buyer to continue making the super-sized SUVs. GM recently announced that their efforts to sell the Hummer line to Chinese Sichuan Tengzhong Heavy Industrial Machines company has fallen through.

Nimnicht GMC-Hummer General Manager Jackie Lynch is still optimistic that another buyer will come along and save the Hummer brand. He reports that sales of Hummer have remained steady despite the uncertainty of the SUV’s future. The dealership reportedly sells seven to ten Hummers each month. In February, their stock was down to nine 2009 models and ten 2010 models.

Lynch said that Nimnicht will continue to sell and service new and pre-owned Hummers as long as the brand is in existence, and will continue to perform authorized warranty work on Saturns – another GM car line that was shut down at the end of last year.

Read more about Hummer and other GM brands that have been sold or ended at Jacksonville dealer says it’s business as usual despite Hummer’s demise.

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

With millions of people unemployed and fierce competition for jobs, many people are considering self employment. Currently, one of the most popular self employment options is to buy and run a franchise. A recent web article by a franchise financing bank gave prospective buyers a few helpful tips on finding and financing the right franchise opportunity.

According to the International Franchise Association, there are over 1200 franchise brands available in the US. Buying a franchise in an area that interests you is the first step to success. Second, you should consider the amount you are able to invest. The investment requirements for different franchises can vary widely; if you do not have a lot to invest, that will rule out some of the higher priced opportunities. One source of fuding that many people forget is their retirement savings. While the best thing to do with retirement dollars is to "leave it for retirement," in these difficult times, all financing avenues should be considered. The Employee Retirement Income Security Act of 1974 allows people to finance a franchise purchase from existing retirement savings with no taxes or penalties.

Finally, perform thorough due diligence on any franchise you are interested in before signing any paperwork. Enlisting the services of a CPA and attorney who specialize in franchise ownership is critical. If you live in the Jacksonville, Florida or Orlando, Florida area and are considering purchasing a franchise, please contact Wood, Atter & Wolf, P.A. for legal counsel.

Read more about finding and financing a franchise opportunity at How to Choose and Finance a Franchise Opportunity.

Turning an idea into reality, whether it's for a novel product or a unique business venture, may involve pitching to a firm with greater resources. Through this process, you can be exposed to serious risks. For example, the potential developer might misappropriate your secret by selling it to one of your competitors or may even begin manufacturing and marketing your invention as if it were their own. Because of this, it is necessary to first enter into a confidentiality agreement.

A confidentiality agreement is also known as a non-disclosure agreement and maintains the ownership of the information by preventing the recipient from disclosing valuable secrets or using them without authorization. The agreement works by providing the disclosing party with legal and/or equitable remedies. In the case of a breach, the disclosing party can sue for monetary damages or file for an injunction.

The specific terms of confidentially agreements vary, but usually address exactly what information is and is not intended to be confidential, how the receiving party may use the confidential information, and a time period for which confidentiality must be maintained.

If you are considering disclosing proprietary information to a developer or investor, it will be wise to first contact an attorney and discuss how a confidentially agreement can protect your secrets.

Looking to purchase a franchise? In today's marketplace there are hundreds of businesses to choose from if you want to purchase a franchise. So how do you narrow the field and find the right franchise for you? Consider these few items.

First, what kind of business are you interested in? The selection of franchise opportunities to choose from is as vast as the goods and services available on the market today—from haircuts (Great Clips®)to cleaning services (Jani-King), to package shipping (Postal Connections ™), to restaurants (Baskin-Robbins ®). You should find a business that interests and excites you, so that you can combine passion and profession.

Next, how much is the initial investment? Franchises can range from several thousands of dollars on the low end to over a million dollars on the high end. Usually there is a correlation of the cost to gross sales and profits, but that's not always the case. For example, McDonald's restaurants, cost one to two million dollars for start up and do an average of over two million in gross sales annually, profiting typically in the six figure range.

The best way to gauge financial success is to meticulously go over the Franchise Disclosure Document with a franchise lawyer, a business and franchise consultant, and an accountant. To that effect, an established franchise, such as McDonald's or Baskin-Robbins ®, may have more predictability when it comes to success than a new franchise; however, a newer franchise opportunity may have more room for growth.

Hopefully, these tips will give you a starting point ifor thinking about a business or franchise investment.

A Tallahassee, Florida, Saturn dealer filed suit against General Motors Corporation earlier this year for violating Florida's franchise laws, but Saturn of Tallahassee's chances of prevailing are not likely. The dealership is co-owned by former NBA player Bob Sura. General Motors announced earlier this year that it plans to sell or eliminate the Saturn brand sometime in 2009, and cut nearly 2,400 dealerships from its network of dealers. After seeing sales drop over 70 percent this year at his Saturn of Tallahassee dealership, Sura feels that General Motors has made his Saturn franchise worthless. In effect, the Saturn of Tallahassee dealership feels it has been wrongfully terminated.

The problems for Saturn of Tallahassee in prevailing in its lawsuit against General Motors lie in the fact that General Motors is now in Chapter 11 bankruptcy and may simply terminate the franchises as part of its restructuring process. If so, Sura and his dealership may be left to accept whatever decisions the Bankruptcy Court makes. Sura and other Saturn dealers' best hope may rest upon finding a new buyer for the Saturn brand and maintaining the goodwill it has developed with its customers over the years; several groups have expressed an interest, including some Saturn dealers.

Auto dealership franchises have to make some of the largest investments of all franchise opportunities available on the market. Like all franchisees the money they spend in advertising and building goodwill benefits the franchisor as well as their own franchise. When a franchisee is in compliance with the franchise agreement and is wrongfully terminated or denied the opportunity to renew their franchise, the franchisee has lost the value of their investment.

If you have experienced franchise renewal problems with your franchisor, or you just have questions about franchise agreements in general, ask an attorney for help.

Marvel Entertainment and Disney may lose some of the rights to characters and stories involving the Fantastic Four and X-Men come 2014. The children of the Jack Kirby, the late artist of several comic books, have given the entertainment giant notice of their intention to recapture the copyrights to the characters conceived by Mr. Kirby.

There is precedent here: in a similar action, the heirs of Jerry Siegel, the creator of Superman, successfully regained some of the rights to the character's origin from Time Warner. This could potentially be a large blow to Disney, which recently acquired Marvel for $4 billion dollars.

The U.S. Copyright Act enables creators to end old copyright grants after a lengthy waiting period and revert them back to themselves. I think artists should be fairly rewarded for their creations, but I also believe in honoring one's commitments. Here it would be ideal if the heirs can work out some agreement by which they are justly compensated but Marvel and Disney retain the ability to use the characters!

Is it actually true that a franchise was terminated over one under-portioned sandwich? In a case that was finally decided at the start of this year, it appears that was exactly what happened to a Pennsylvania couple—owners of a Quiznos franchise. They were terminated after a secret shopper purchased a Prime Rib Philly Cheesesteak sandwich at their Quiznos store.

In 2006, as part of a national advertising campaign being planned by Quiznos in which Quiznos planned to claim its sandwich contained twice as much meat as Subway's comparable sandwich, Quiznos sent out secret shoppers to several of its franchisee locations to purchase Quiznos' Prime Rib Philly Cheesesteak sandwiches. The purpose was to make sure each sandwich contained at least 4.5 ounces of meat. A secret shopper at the Pennsylvania franchisee's store purchased a sandwich that purportedly only had 4 ounces of meat. Quiznos sent out a letter terminating the franchisee. Although Quiznos claimed their plan was to allow the franchisee to cure the default, Quiznos sued the franchisee only two days after sending them the termination letter. In January, the franchisee won their case for wrongful termination, being awarded $349,797.00, plus fees, court costs, and post judgment interest.

It can be intimidating for a single franchisee to contemplate going to court with their franchisor, especially if the franchisor is large, but franchisees need to remember, the courts are not looking at the size of the litigate they are looking at the strength of the litigant's case. If a franchisor has terminated a franchisee in violation of the terms of the franchise agreement, then a single franchisee should not be afraid just because of their size to do what is necessary to protect their investment.

Dispute resolution is an important term in a franchise agreement. Franchise agreements can have forum selection clauses, arbitration clauses, and choice of law clauses, among other dispute resolution options. When Congress passed the Federal Arbitration Act, it brought the use of arbitration onto equal footing as other dispute resolutions options and the traditional venue of the courts. Not long thereafter, arbitration came to national prominence and became a popular option for franchisors to use in their franchise agreements.

Current research has shown that over the last ten years, the number of arbitration clauses in franchise agreements has remained relatively stable (in a little less than half of the franchise agreements). Today, some groups want to eliminate required arbitration clauses in franchise agreements. Currently, there is a bill in Congress: the Arbitration Fairness Act. One provision of the Arbitration Fairness Act would make mandatory arbitration clauses illegal in franchise agreements. This act is opposed by the International Franchise Association. Some franchisors, however, are moving away from arbitration clauses by their own choice; for example, General Nutrition Centers Inc. has quit using arbitration clauses in their franchise agreements.

If you are a franchisor, whether or not to use an arbitration clause is a matter of weighing a number of factors. Sometimes a choice of forum and choice of law provision may be the better option. These decisions are best made with the assistance of a franchise attorney. If you are a franchisee, have an attorney review the franchise agreement before you sign the agreement or renew your franchise agreement.

When it comes to opening a new franchise, prospective franchisees face many issues, but one issue that often ends up in court when franchise relationships fall apart is territory disputes—typically the argument is that there was territory encroachment. Territory encroachment and territorial concerns come in many ways, such as: requirements to develop the territory to a specific level of profitability in a certain amount of time, whether the franchisee has the right of first refusal to develop territory bordering the franchisee's existing territory, factors that might change the nature of the territory (i.e. population, development), and how 'exclusive territory' is determined (i.e. by population, geography, number of customers).

When contemplating purchasing a franchise it is important that franchisees look closely at whether the territory is exclusive and under what circumstances the territory—even exclusive territory—may be encroached upon. There are many ways franchise territories may be encroached upon. For instance, a salon franchisee may be given an exclusive territory and licensed to sell the franchisor salon's particular shampoo product, but then the franchisor salon may sell that same shampoo product in a local grocery store. Obviously, the franchisee could lose business and money by such an arrangement; even though, the franchisor never opened a competing salon in the franchisee's exclusive territory.

Because there are many such concerns with regard to territory, if you are interested in opening a franchise or are already in the franchise business, you should review any Franchise Agreement and Franchise Disclosure Documents with an attorney familiar with franchise law. Have you ever experienced a territorial issue with your franchise or business, feel free to comment or share your experience?

As I've been watching the changes in the in-home movie rental business and the continuing decline of the Blockbuster chain, I began to think about how critical it is for franchisors and potential franchisees to try to imagine what their particular field of business is going to look like in ten years. Franchising provides a great opportunity to own a business without having to invest a lot of money, but beware! Purchasing almost any franchise is still an investment and most franchise agreements are binding for at least ten years. The last thing you want is to invest in a franchise, only to have that industry becoming obsolete in a few years.

To use home the in-home movie rental business as an example, look at the changes that have occurred over the last ten years—VHS and VCR movies have become antiquated. DVRs (digital video recorders) like Tivo record several hours' worth of television, in HD, and allow rewinding or slow motion replay of live programming. And at my whim, I can order a recently released movie On Demand, for little or no cost.

Technology's evolution is not the only change that has occurred in the in-home movie rental business. As our society gets even faster paced, people have become much more conscious about saving time, and have become master multi-taskers. People want to eliminate excess trips to the store; if they can make one trip to buy their groceries, prescriptions, and movies, they are going to do it. Thus, we have seen a steady decline in Blockbuster franchises and an explosive growth in Netflix and Redbox kiosks.

So how would you evaluate the success or decline of a franchise? First, do some research and consult with a business expert to help you carefully consider how changes in technology or society might affect your industry of interest in both the short- and long-term. I team up with the franchise experts, Alpha Growth Strategies, and encourage my clients to consult with them. Second, bring a franchise attorney a copy of the business' Franchise Disclosure Document. The attorney can explain what your rights and obligations will be for the term of your Franchise Agreement.

Amidst a slew of franchise disputes between deposed dealers and General Motors and Chrysler, Ron Bloom, head of the automotive task force for President Obama, addressed Congress and advised that the reinstatement of terminated franchise agreements could jeopardize the car companies' return to profitability.

As discussed in a previous post, GM is planning to shut down over 2,000 of its dealerships and Chrysler is looking at eliminating 789 of its own. However, a bill was recently approved by the House of Representatives to undo those cutbacks. Some dealers are even resorting to franchise suits in state courts to prevent forced closings. Mr. Bloom indicated that the reductions are critical to streamline the operations of the two troubled automakers.

Sadly, I think that the dealership closings may be necessary at this stage, but the blame lies squarely on the shoulders of GM and Chrysler for allowing their networks to become bloated and saturating markets with dealers as opposed to employing the controlled outlet strategy of import car manufacturers. It's a shame that hard-working business owners are having their stores taken from them through no fault of their own. Their collective mistake was betting on the wrong horse!

Reading through the news today it seems restaurant franchises are willing to do just about anything right now to get customers in the doors. The major hamburger franchises have always offered toys and collectable glasses to purchasers of certain meals. Additionally, some of the larger franchises conduct games annually, or almost annually, where customers can win high dollar prizes, including cash—think McDonald's® Monopoly® game. Kentucky Fried Chicken just unveiled a new sandwich with no bun! Yes, I said no bun. Other Franchises such as Tropical Smoothie Cafés and CiCi's Pizza are offering customers the chance to win VIP trips to Hollywood studios and Pizza parties where families can get coupon books.

Not every business has the financial resources like McDonalds® or other larger franchises. So what does a smaller franchise or business with more limited resources do to get the customers to their stores? I think one thing franchises can do is focus on their core customers. Offer a specific gimmick that would appeal to this unique group. Another strategy is joint advertising promotions. This means teaming up with a complementary business, and develop a promotion to benefit both businesses.

What kind of approaches are you using to maintain and grow your business or franchise in our current economic times? Are they working? Please, feel free to share.

The Volt can run on electricity alone, but requires lots of charging so who knows if such mileage results are remotely attainable for the average driver. The Volt's range on electric-only propulsion is 40 miles when it is completely charged. Theoretically, you could get infinite mileage for as long as the battery pack has enough power.

I think that potential licensees and car buyers should be wary of such lofty projections and also consider the fact that the development time of the Volt was considerably shortened, while the Prius is tried and true and has been around for nearly a decade!

I am skeptical that the quality and reliability of the Volt will be adequate as its creation appears to be a knee-jerk reaction to the giant spike in gas prices. Unless the Volt ends up being bulletproof and achieves insane fuel economy, Toyota will likely be the victor in this fight.

Do you think the Volt will pan out? Please post your comments or contact me to discuss!

Two auto industry titans are duking it out to sell their respective hybrid powertrain technology to other manufacturers and suppliers. Toyota and General Motors, the #1 and #2 carmakers in the world, are approaching competitors to license their slew of patents and other intellectual property to them.

Toyota has long been the preeminent leader in hybrid vehicles, introduced the first-generation of the ubiquitous Prius model with Hybrid Synergy Drive in 2001 and has sold millions upon millions of them. True to form, GM was late to the game and is rushing its plug-in hybrid model to market, the 2010 Chevrolet Volt powered by the Voltec propulsion system.

GM is touting the virtues of the Volt which has garnered preliminary mileage estimates of 230 mpg! At this stage, the 230 mpg claim seems ludicrous, but the Environmental Protection Agency appears to be backing it up.

Do you think 230 mpg is possible? Please post your comments! Up next, I'll discuss why I think we should reserve judgment as to the efficacy of the Volt.

Goldman Sachs Group, Inc. is currently doing damage control after learning that one of its former computer programmers, Sergey Aleynikov, allegedly made off with highly sensitive computer code comprising Goldman Sachs' latest trading model. A trading model consists of a series of algorithms that temporally optimize risk. The model dictates investment strategy and transactions are made accordingly. This entire process is referred to as automated trading.

A trading model constitutes key intellectual property and enables investors to make moves more quickly than more traditional means. Automated trading has become more and more popular as it has yielded huge profits for investment banks. Higher levels of speed and volume confer a considerable competitive edge, so banks seek to create models that execute trades as quickly as possible. Million dollar transactions can take place less than a second!

What's surprising about Goldman Sachs' predicament is that the theft was allegedly perpetrated by a programmer, and not a high-level trader. In addition, Aleynikov is accused of stealing actual computer code as opposed to memorizing the platform and drafting a new, copycat version. This indicates that companies must identify potential leaks from every angle and take a variety of precautions.

I wonder if Goldman Sachs had confidentiality agreements with its employees. With rogue former employees like Aleynikov, it may not have made a difference, since he probably doesn't have the assets to compensate Goldman Sachs for their financial losses and business advantages. I also wonder if there were non-compete agreements in place, preventing former employees from running off to work for a competitor, or start their own business. Furthermore, I wonder how much of Goldman Sachs' information could have been protected under trade secret laws, where minimizing the exposure of these secrets to employees would offer them the best protection.

Are you a business whose assets are in intellectual property? Do you have special skills, customer lists, or processes you don't want your competitors to have? An intellectual property lawyer with a strong foundation in business law can help you cover all your bases!

Independent internet radio service providers have struck a deal with the Copyright Royalty Board that will keep them afloat. The internet stations were concerned that astronomical royalties would inflate their costs to the point of sinking their businesses. Some had worried that required royalties could potentially be set at double their total revenue!

Internet radio stations continuously stream music and draw over 42 million American listeners every week. Traditional radio stations have licensing agreements in place which enable them to legally broadcast music and which are paid for by substantial income from advertising.

The contract agreed upon by the parties spans 10 years, expires in 2015, and includes a graduated royalty fee structure whereby artists and record companies receive progressively higher payouts over time which may be tendered in the form of a cut of the stations' profits. The compensation paid will be directly proportional to the popularity of the radio stations.

Some key stations, such as such as Pandora, have yet to join the deal, but it is anticipated that they will soon sign on the dotted line. Such an agreement was critical for internet radio as it needed a plan that would enable it to be financially viable. The industry is still fairly new and in its formative years, so very few independent providers are turning a profit right now. It will take some time before these providers can compete with larger stations that are affiliated with large media conglomerates.

I love internet radio and listen to it practically every day! It has so many more dimensions than regular radio and gives users new ways to mix and match music to suit their individual tastes. I'm glad that some middle ground could be found so that internet radio can go on uninterrupted!

Are you a fan of internet radio? Let me know what you think!

In the wake of the worst American recession since the Great Depression, plummeting vehicle sales, and impending Chapter 11 bankruptcy, embattled automaker General Motors announced in 2009 that it would end franchise agreements with 1,270 dealerships across the country in 2010. Of its eight current nameplates, Pontiac will be eliminated, and Saturn, Saab, and Hummer all have been sold off.

GM stretched itself too thin and saddled itself with an inflated number of uncompetitive brands. The irony of the situation is that GM is finally showing flashes of potential and is producing desirable cars (e.g. the ZR1, CTS, and upcoming LaCrosse) after years of bad engineering, bean counting, and allowing that cut-corner mindset to adversely affect the quality of its cars.

The damage is likely to get much worse: GM is seeking to slash the number of dealerships by a total of approximately 2,400 by the end of 2010. GM failed to strategically align itself globally, made poor agreements with the United Auto Workers, and neglected to value engineering and the quality of its products above all else. GM made its own bed and has to sleep in it. Regrettably, now thousands of dealers may have to pay the price for GM's ineptitude.

Although GM launched an pathos-packed campaign (including a television commercial!) to re-new its tarnished image and gain America's support, how would you feel if you were abruptly dropped after a franchise agreement you had worked hard to negotiate and uphold? I would be livid if I lost my business due to the mismanagement and incompetence of my franchisor!

How do GM's actions strike you? Is it fair to the franchisees? Contact me to discuss!

A highly effective way to expand your business is franchising, but what makes some franchisors more successful than others? The following tips may guide your decision-making process as you grow your company through franchising.

It is important to work with a reputable and experienced franchise development company. Even as a franchise attorney, I turn to my business development experts at Alpha Growth Strategies to review and advise as to the best way to make business take off. Select a company that is willing to assist you throughout the franchising process, including negotiating leases and making financial projections, and not just with producing contracts and the Franchise Disclosure Document.

Also, don't be frugal when it comes to your initial investments in a franchise operation. Typically, franchisors who enjoy success are those who invest in state of the art computer and IT systems. Communication and information is the foundation of any business venture. Additionally, select a location for the franchise headquarters that includes room to expand and that will deliver a positive first impression to prospective franchisees. These may seem like unreasonable expenses at first, but the extra investment will pay off with a higher rate of franchise purchases in the future.

Finally, hire a good public relations firm with experience in the field of your business. Such an outside source of expertise will help generate ideas to distinguish your company from others in the market place.

Once you have developed a business plan and established a franchise, it is important to stay connected with your franchisees. Your success, in the form of license and franchise fees as well as profit sharing, may depend largely on their success. Therefore it is vital that you are able to be their guide. Consultants in the field of franchising have identified various ways to deliver messages to business contacts.

The use of newsletters is one of the more traditional methods of sharing information. For example a franchisor may send franchisees a monthly newsletter to discuss brand ideas as well new marketing insight. In addition, an innovative franchisor will solicit feedback and advice from franchisees about their particular operation. This will provide material for future newsletters. In this manner, each franchisee may benefit from the collective knowledge of the whole group. Another way to disseminate information is through videos. This is especially useful in situations where language barriers are present, such as international restaurant franchises.

Of all the communication methods available, intranets are the most revolutionary because they can relay information in an instant. An intranet is a private computer network that transmits secured information between users. This is different from the Internet, where the public has general accessibility to data. Franchises using intranets benefit from message boards or chat boards where franchisees can post messages or get quick advice from each other. Therefore franchisees save time and money as they are able to get help with problems almost as they arise.

For various reasons, a franchisee may want to get out of a particular business and sell the franchise. But is this permitted? Can a franchisee sell a franchise or is this something only franchisors can do?

In general, the answer is yes, however some conditions may apply depending on the Franchise Disclosure Document (FDD). In addition to governing operational issues such as royalty fees, the FDD often contains provisions regarding franchise resell. For example, the original franchisor usually reserves the right to approve new buyers. This provision protects the franchisor as well as other current franchisees by preventing under-qualified individuals from becoming business owners and besmirching the business reputation and consumer good will. On the other hand, the franchisor's right to approve the new buyer might serve as a detriment by hindering the franchisee's ability to sell the business.

If you are considering purchasing a franchise, examine the FDD to fully understand the terms of the franchise agreement. Particularly, look for provisions that might affect franchise resell if you are unsure of long you want to own the business. It is important to identify undesirable aspects of the FDD because a franchisor may be willing to negotiate. In any event, it is not advisable to enter any purchase agreements without first consulting a franchise attorney.

Like other entrepreneurial individuals, you may have thought about purchasing a franchise but do not know where to start. Though we use goods and services provided by franchises on a daily basis, information about buying the actual business does not always appear to be so readily accessible. In reality though, the information is easy find if you know what you are looking for.

Before looking at any specific franchises, determine what type of business most appeals to you. For example, if you have enjoyed working in food service over the past years, you might prefer a restaurant franchise or other similar food service oriented business. On the other hand, it is not advisable to purchase a franchise related to past negative work experiences.

Then, assess whether that type of business is economically feasible in your geographic area. Just because you like a business idea does not necessarily mean customers will. Accomplish this by examining other franchises in the area that have endured throughout the years. I usually refer my clients to a franchise development consultant, like Alpha Growth Strategies, to assist in evaluating potential sites.

After determining what type of business will fit both you and the area, your search for franchise opportunities will be more focused. Find information about specific business at the Franchise Registry. The Franchise Registry lists businesses that are approved by the Small Business Association as being fair.

Don't go about evaluating franchise opportunities alone! For more advice regarding franchise opportunities or purchasing a franchise, contact a franchise attorney to schedule a consultation, and be sure a franchise development consultant participates in the meeting.

The recently deceased superstar was known by many names: the King of Pop, M.J., Jack-o, and the list goes on. We also recognize him either as a dark-skinned cherub-faced child or a pale, middle-aged man with over-processed facial features. Why don't we also know him as an Intellectual Property Goldmine? Love him or hate him, the supremely talented character was a genius when it came to securing various forms of intellectual property during his long and decorated career as an artist and performer. Michael Jackson brilliantly relied on copyrights, trademarks, and even patents to protect his work, and was an avid collector of others' proprietary works.

Jackson registered his name with the U.S. Patent and Trademark Office and held a multitude of trademarks ranging from performances to merchandise to fan clubs. Even for a personality as distinctive as Jackson, trademarks played an important role in further distinguishing him from others.

Not only did Jackson guard his own work and attributes, he even acquired copyrights to other music. He owned a 50 percent stake of Sony/ATV, a joint venture which controls publishing rights to two hundred and fifty one Beatles songs. Jackson famously outbid Paul McCartney to purchase the song-copyright catalog in 1985. Today, Sony/ATV is estimated to be worth upwards of $1 billion dollars.

Amazingly, Michael Jackson even patented his very own invention, a method and means for creating an anti-gravity illusion. The patent features a shoe interfitting with a peg protruding from a stage and enables a wearer to lean forward at a 45 degree angle to the floor without falling. It certainly appears to be unprecedented for a musician to have obtained a patent himself.

Despite a poor economy, a weak job market, and an increasing number of layoffs, now is a great time to buy a franchise. The number of franchises in the industry has increased and created competition among franchisors, which are becoming more aggressive in recruiting franchisees.

Some franchisors have resorted to attracting buyers with discounts on initial fees and costs. For example, one company announced that it would waive a $30,000 franchise fee for qualified military veterans.

Other franchisors have developed creative tactics to target nontraditional franchisees. One such tactic is to offer employee discounts. This plan encourages employees to purchase a franchise by rewarding high performers with a discount on the initial franchise price. The resulting franchises are often highly successful because the franchisee is better-trained and less likely to make costly mistakes.

Franchisors are also offering money-back guarantees to reduce the uncertainty associated with buying a business. A typical guarantee provides that if the business has not reached certain revenue goals after the first year, the franchisor will buy the franchise back. In most cases, the guarantee is only valid if the franchisee follows franchise guidelines in operating the business.

It is a buyer's market when it comes to franchises. In light of this competition, be aware that many franchisors are willing to negotiate fees and payments structures. If you have thought about purchasing a franchise, consult a franchise attorney for advice and assistance with the acquisition.

If you have a successful business, you may want to consider expanding through franchising. By franchising, you can grow larger and faster because the franchisees provide the funds for the growth, not you.

One important issue to consider before franchising is whether you have developed a strong trademark for your business. This is crucial because a strong trademark delivers a consistent message to consumers about your franchise's products and services. Franchisees will pay higher royalties for a franchise like Subway, which has a nationally reputed trademark, than they will for a franchise with little or no consumer recognition.

In the very least, be sure to register your trademark before franchising. Registration provides a presumption that your trademark is valid. This will facilitate any claim of infringement in the unfortunate event that one of your franchisees attempts to improperly license or use your trademark.

A strong trademark is a term or phrase that does not merely describe the goods or services. Rather, strong trademarks require imagination, thought, or perceptions to link the mark with the provider of the goods or services. Such marks may suggest the quality of the goods or services, or may not have anything at all to do with the goods or services. For example, Greyhound might imply that a bus line provides fast transportation. Apple, on the other hand, may have nothing to do with a line of computers.

Franchises are built upon sound business models. However, buying into a franchise does not always guarantee success. As a potential business owner, financial success depends on whether or not you are diligent and avoid some of the common mistakes new franchisees often make.

Commonly, a franchisee proceeds to purchase a franchise without fully understanding the terms in the franchise disclosure document (FDD), the document outlining the franchisee's and the franchisor's responsibilities. This results in later misunderstandings between the parties, such as conflicts in fee scheduling and grand opening dates. If you are thinking about buying a franchise, a good idea is to create a list of questions that arise when you review the disclosure documents. Go over this list with your attorney at a later time. Also, present the list to the franchisor for written clarification to your questions.

Another mistake is failure to contact enough current franchisees. By speaking with other franchise owners, you will be in a better negotiating position because you can compare the offer the franchisor made you with offers made to other franchisees. Contact current franchisees other than those referred by the franchisor. In this manner, you will come to understand both positive and negative aspects of the franchise.

Similarly, franchisees also do not investigate failures within the particular franchise. When contacting other owners, find out what has and has not worked for that business. This will help avoid costly mistakes and may even save your franchise in the future.

Avoid these mistakes by contacting an experienced franchise attorney to set up a consultation.

Has this ever happened to you? You come up with a great idea for an invention. But before giving any thought to getting a patent, you contact a company and offer to sell your lucrative and profitable idea. Have you forfeited your rights to patent the invention? How do you disclose a proposal without forfeiting ownership?

You may still be able to patent your invention. The patent application will require proof that you came up with the idea first. One way to establish you are the inventor is to provide evidence of correspondence between you and the company discussing the idea.

However, a more effective method to avoid forfeiting a claim to an invention is to plan ahead by filing a provisional application for patent. A provisional application grants an earlier filing date as well as "Patent Pending" status to be used when disclosing your idea. Protection lasts up to 12 months from the filing date and is a relatively inexpensive investment. Thus, you are able to disclose your invention to potential buyers without fear of it being stolen and without the higher application costs associated with non-provisional patent applications. Before the 12-month period lapses, you can either allow the pendency status to expire or convert the provisional application to a non-provisional application, which will provide the benefit, if the application is granted, of being able to sue for patent infringement.

You can protect your secret formulas, recipes, or processes through trade secret law as long as the information at question is valuable to your business and you keep the information secret. But what measures do you have to take to maintain secrecy?

The Florida Uniform Trade Secrets Act, which governs trade secrets in Florida, only requires the information to be subjected to efforts that are reasonable under the circumstances to maintain secrecy.

One of the more famous cases that concern the maintenance of trade secrets is that of Coca-Cola. As you may be familiar, the secret formula for Coca-Cola is known to only a handful of senior executives. Each recipe holder must swear by oath not to disclose the secret recipe. This inclusive group appoints a successor when one of them dies to ensure the number of individuals with knowledge of the Coke formula remains constant. Finally, the designated executives are not permitted to travel together because a single accident might eliminate the formula's existence.

Another case involved KFC's extreme measures taken to protect their recipe from being stolen, during its relocation.

Surely, you do not have to go to these extremes to protect your trade secret. Secrecy is the main requirement. Therefore, you can maintain secrecy simply by not disclosing your information. You can accomplish this by keeping written documents, such as recipes, in a secured environment such as a safe or even a locked drawer. Also, if you must disclose your information, to essential employees for example, be sure that you use a confidentiality agreement or have them sign a non-disclosure form. Furthermore, if you wish to protect a website source code, you can prevent Internet users from viewing the code.

I disclosed the secret to preserving trade secrets in an article published by the Jacksonville Business Journal; read to find out more!

If your employer assigns you the task of producing a creative work, such as a photograph or a collage for advertising purposes, do not automatically assume you will own the intellectual property (IP) rights or even receive credit for it.

The employer usually owns the IP rights to anything made in the "ordinary course of employment." This is known as the work-for-hire doctrine. As with most legal concepts, the doctrine defines the "ordinary course of employment" in a very precise manner, reducing it into factors to be considered together. One factor is whether or not the work is produced during company time or with company resources. Another factor is whether either party takes action to indicate ownership of the intellectual party. Finally, a third inquiry is whether the work is included in the employee's job description. Projects that are within the employee's job description are likely considered works-for-hire.

However, you can still retain IP ownership over property created in the ordinary course of employment by executing a written agreement with the employer. Negotiate with your employer so that the terms of the agreement are clear and all parties involved are aware of expectations and responsibilities. Retaining such rights is important because IP licensing can be highly profitable.

If you have thought about engaging in creative endeavors for your employer, consider whether the product is going to be a work-for-hire. If you are unsure about your rights, or wish to retain certain rights with the ability to license, contact me for advice regarding negotiations and drafting the written agreement.

Veteran franchise owners advise initial start-up costs can become excessive if you are impatient. In other words, rushing to open your business almost always costs more in the long run. The following tips provide ways to reduce franchise start-up expenses by deliberate decision making.

Negotiate fees: While fees are generally the same so that all franchisees are treated equally, contact existing franchisees to see what their fees were. If there is a deviation, even slightly, find out the reason for the lowered fee, and see if you can qualify for the same discounted rate. This will put you in a better position to negotiate with the franchisor.

Package Deals: Some franchisors offer a package franchise, also known as a turnkey package. In these arrangements everything needed to begin operating the business is included for one price. For example, the franchisor or a third party may supply the inventory, the physical store, and all the equipment for operating the business. Turnkey packages benefit franchisees by saving time because franchisee does not have to acquire and organize the resources on their own. On the other hand, turnkey packages are more expensive because the added convenience adds to the price as well.

Shop For Equipment: When starting a franchise, many business owners fail to shop around for equipment. It is a good idea to get as many prices for equipment as possible in order to determine a reasonable price range. Also, by obtaining bids from multiple sources, you can negotiate with your selected supplier for even more savings.

Used Equipment and Fixtures: Purchasing used equipment for your business can translate into substantial savings. Just make sure the items meet your franchise guidelines. For example, buying used commercial kitchen appliances for a restaurant or used display shelves and fixtures for a retail store and greatly reduce the initial cost of operating.

Facing the reality of being laid off by your company, you may have considered the prospect of owning your own business. While there are various entrepreneurial avenues to financial independence, many people are turning towards becoming franchisees. But what businesses are available for purchase?

Many franchise websites offer lists of available franchises. In particular, you can narrow your search by industry type, stay-at-home solutions, or environmentally sound "Green" franchises such as cleaning services, which employ eco-friendly detergents that do not contain CFCs.

Many franchises offer a proven business model as well as a widely recognized brand. With the necessary capital and initiative, you can soon be at the helm of your own business.

Such online lists of franchises are a good starting point to determine what type of franchise you intend to procure. But instead of entering into any agreements online, you can avoid potential scams by contacting an experienced franchise consultant, and consulting with a franchise attorney.

Many people consider purchasing a franchise, but what about the other end of the franchising industry: expanding their own business and becoming a franchisor? Not all businesses translate into good franchises, however. So how can you determine whether your business will succeed as a franchise?

Good franchises share a few common elements. First, your business plan should include goals and objectives in order to identify your client profile. As the franchisor, keep in mind that your client is not the end consumer, but rather the individual purchasing your franchise. To advertise more effectively, determine the precise client demographic your franchise would most likely attract.

A business plan should be easy to replicate. One way to accomplish this is to have a plan featuring specific details, right down to daily operations and training. Franchisees are often people who want to run a business, but wish to forgo the trial and error inherent in building a business from scratch. Therefore, your product should meet their needs in providing a business ready for operation without undue experimentation.

Finally, determine how many stores a geographical region can support. Do not make the mistake of allowing too many franchises operate within a close proximity to each other. This inevitably results in competition among your franchisees.

Wood, Atter & Wolf recently hosted an exhibit at the 2009 Business & Career Expo, hosted by the Jacksonville Regional Chamber of Commerce at the Prime Osborn Convention Center. Admission was FREE to the public!

We showcased Trademark and Franchise law with Alpha Growth Strategies, who are experts in business development and franchising. Together, we featured legal and business consultations regarding trademark registration, licensing, and business/franchise evaluations.

The Expo featured 250 exhibits, and attracted over 1500 people. For more information on next year's event, contact us.

If you have been involved in a franchise deal in the past few years, you may be more familiar with the latter term in the title: the Uniform Franchise Offering Circular, or the UFOC. However, as of July 2007, the Federal Trade Commission has replaced the UFOC with the FDD. Despite this change, the term "UFOC" is still widely and incorrectly used. Now, the FDD is the document that a franchisor must provide to potential franchisees prior to entering into a contract.

Like the UFOC, the FDD discloses details to potential franchisees in order to facilitate an educated buying decision. However, the FDD is different form the UFOC is several aspects.

Differences between the FDD and the old UFOC include different time requirements governing when such disclosures must be made. Also, unlike the UFOC, both parties can use passwords and electronic signatures to electrically sign an FDD.

Perhaps the most important change provided by the FDD is the requirement that the franchisor disclose more detailed information to the franchisee. Such newly required disclosures include information about parent companies; information regarding lawsuits or bankruptcies; whether any interest exists between approved suppliers and franchise executives; information about the types of distribution channels the franchisor or other franchisees use; and finally data regarding how many franchises were sold, terminated, or transferred over the past three years.

As you consider if and which franchise to purchase, be sure to pay close attention to the FDD. It should be an in-depth disclosure, with each paragraph having legal or strategic significance. For guidance with the UFOC, contact an experienced franchise attorney and a franchise consultant.

If you're thinking of acquiring a franchise, it is a good idea to first investigate the company. Although there is no uniform database that will inform you whether a company is operating legally or in good faith, there are a few leads to utilize in your investigation.

Find out if the company has registered with the Better Business Bureau or if anyone has filed a complaint against the company. You can discover if any complaints have been filed by contacting the Federal Trade Commission. Simply send a written request for information to the following address. Include in the letter the name of the company of interest as well as your name and address. Often, this is a free service to the public. The address: Freedom of Information Act Request, Federal Trade Commission, Washington, D.C. 20580.

Also, you can check out the applicable state agency for registering business opportunities. In Florida, franchisors are required to file with the Florida Department of Agriculture and Consumer Affairs, Division of Consumer Services.

Another fact to consider is whether the company has changed its name in the past. Businesses that alter their name and change their address of operation may have something to hide or wish to avoid accountability. Furthermore, it is a good idea to obtain the contact information of 10 prior franchise purchasers. Get in touch with them to find out how this franchise has dealt with others in the past. Also, make sure these references are legit and not just paid by the franchisor to give a good review. Finally, another good idea is to find out the number of other franchisees in your geographic area. It may not be a good idea to enter a saturated market.

Above all, when deciding whether or not to purchase a franchise, you can never be too careful. Not only should you consult with a franchise attorney to cover the legal requirements, but you should also consult with a franchise consultant. I recommend Alpha Growth Strategies, whose expertise can benefit any franchise across the country. They can be contacted at 417 Cheryl Court, Jacksonville, FL 32259.

What happens to your intellectual property when you share it on a social network such a Facebook? For a short period of time, user content such as photos appeared to belong to the website.

Recently, Facebook briefly changed its terms of service. The new terms appeared to claim ownership in the intellectual property rights of any user content you uploaded, even after you deleted your account. Critics claimed that under this version of the terms, Facebook could potentially use your photos for commercial purposes or prevent you from doing the same.

After protest from users, Facebook CEO, Mark Zuckerberg, reverted back to an original version of the terms of use. The language granting Facebook such extensive ownership of your content appears to be absent. Zuckerberg stated in his blog that it is necessary to have some license over user content in order for the network to exist.

The team at Facebook is now in the process of drafting new terms of service that is more user friendly and easier to understand. Facebook users are encouraged to provide ideas for the new document. Read more about this topic here.

Yahoo! Finance recently published an article listing the top 15 franchise failures for 2008. They based the ranking on the rate of Small Business Association (SBA) loan defaults among franchisees. Yahoo! cited the troubled economy as the major factor for the failures.

Topping the list were Noble Roman's Pizza, with 53% of franchisees defaulting on their SBA loans, PJ's Coffee and Tea Café, with a 50% default rate, and Super Suppers, with 42% of the gourmet prepared meals franchise failing. Pizza franchises seem to have fared the worst out of all the business types, with five of the fifteen biggest failures being pizza franchises.

What can potential franchisees take way from this story? If you are considering opening a franchise, it is important to do your due diligence. Take a close look at which franchises are failing and why, before you take out an SBA loan. You should scrutinize the Franchise Disclosure Documents and the Franchise Agreement with the aid of an experienced franchise attorney. An attorney can also help you conduct research into the parent company's background, which is invaluable in helping you to better understand the financial aspects of the business, and to determine whether there are red flags pointing towards the business' demise. Please contact our firm for Franchise legal counsel.

To find out more about these unsuccessful franchises, visit Top 15 Franchise Failures.

"Pseudo mark" is a designation the U.S. Patent & Trademark Office assigns to marks that has an alternative meaning or spelling. For example, if the mark was comprised of H2O arranged in a cascading manner, the pseudo mark field in the USPTO database might display the mark as "water fall."

The USPTO assigns pseudo marks in their database to assist in the trademark search process.

The pseudo mark label does not show up on the registration certificate, and this categorization has no legal significance.

The 3 Golden Rules in determining whether a business is franchiseable are whether: 1. There is a UNIQUE concept 2. The operations are SIMPLE, so that it can be replicated and easy to train 3. The business has a history of FINANCIAL SUCCESS

Gordon Ramsay, the notoriously razor-tongued head chef on Fox's reality show, "Hell's Kitchen," is hosting another show called "Kitchen Nightmares." "Kitchen Nightmares'" premise is much broader than that of its predecessor, because Chef Ramsay not only critiques the menu items, but also the way the business is operated. Each episode focuses on a quaint Mom & Pop restaurant in desperate need of an overhaul. Think of a marriage between "Trading Spaces" and "Nanny 911."

Chef Ramsay addresses problems by sampling the menu, rummaging through the inventory, observing the work habits of the owners, managers, and chefs, and considering the decor in the establishment. As expected, he will eat "the worst meal" he has ever had. Surprisingly, however, he will find moldy cherry tomatoes in the same container as fresh ones, or cooked chicken stored with its raw counterparts. And typically, Chef Ramsay will identify communication problems among those running the restaurant, as well as ambition or respect issues within those individuals.

Chef Ramsay's remedies often include simplifying the menu. In one episode, he made the ingredients easier to obtain by choosing supplies from local farmers. His remedy also includes defining and delegating very specific responsibilities to each owner or manager. And finally, he gives the restaurant a face-lift. It's worthy to note that he doesn't do any renovating, and he often leaves the fixtures as they are, but his creativity totally transforms the dining room atmosphere. In an episode with a waterfront seafood-themed restaurant, he added miniature fish bowls at each table, and gave diners a piece of rope with a guide to tying nautical knots while waiting for their food. The "little" things and a coat of fresh paint often made for an astounding presentation.

In essence, Chef Ramsay made these restaurants franchisable. By offering fresh, simple, yet gourmet menu items, and serving in an aesthetically pleasing dining room, he made the products and the service UNIQUE. By delegating management responsibility, streamlining food preparation, and implementing hygenic procedures for food storage, he made the business method SIMPLE. And finally, of course there are always panning views of the customer line out the door, to show that this is a FINANCIALLY SUCCESSFUL operation.

Are you a business owner? Would you like a Chef Ramsay-style consultation (minus the curt insults) of your operation to determine whether it is franchisable, or find out what you can do get it to that stage? Is your business at the stage to prepare it for franchising? Arrange a consultation with me.

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 new disclosure requirements came into effect in July 2008. The FTC has an excellent FAQ page to address questions concerning this amendment. It is a fantastic resource for franchisors and franchisees.

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.

Trademark rights continue as long as the owner continues to use it consistently to identify goods or services. A trademark owner can lose rights to the trademark through abandonment of the mark, non-use of the mark, or by granting naked licenses. Tally-Ho Inc. v. Coast Community College District, 889 F.2d 1018, Footnote 6 (11th Cir. 1989).

Getting our minds out of the gutter, "naked licenses" have nothing to do with nudity. Naked licenses are when a trademark owner licenses the use of a trademark without controlling the quality of the goods or services provided by the licensee. If consumers cannot expect consistency of goods or services associated with a trademark, in effect, consumers will cease to attribute those products with that mark. This is essentially the same as non-use of a trademark.

Quality control is vital in trademarks and licensing, which is why many franchises thrive. The intolerance for anomalies assures consumers that they can depend on the goods and services to be exactly as they expect. This high level of predictability is the secret to many franchises' success.

So trademark owners, don't be caught with your pants down when licensing the your rights. Ensure that your licensees are delivering the same quality of goods and services that you have originally attached to your trademark.

While monogamy is the prevailing standard accepted in our society when it comes to spouses and boyfriends or girlfriends, this is not necessarily so when it comes to a license for your patent or trademark.

When you offer the rights to use your patent or trademark, in exchange for fees and royalties, you are licensing those opportunities to another. That other party is called the licensee.

A monogamous license, more appropriately termed, an exclusive license, is where you have only one licensee. Typically, licensees agree to paying higher fees and royalties for the benefit of being the only ones who are allowed to benefit from the intellectual property. NBC was hugely successful last month, because they were the exclusive network to provide Olympic coverage.

There are times, however, where it benefits the patent or trademark owner to enter into a licensing agreement with as many licensees as possible. This is a non-exclusive license. Although a licensee will probably pay less in fees and royalties, the patent or trademark owner benefits from collecting this revenue from multiple licensees. Franchises are an excellent example of non-exclusive licenses to numerous franchisees for the use of trademarks, patents, and other proprietary assets.

Miami, Florida based burger franchisor Burger King, the second largest burger food chain in the United States, recently announced it plans to remodel and redesign its 12,000 restaurants worldwide. The 20/20 design—and no, that is not the popular ABC news program's design—is a determination by Burger King to provide a look that is "contemporary, edgy, and futuristic." The cost of the remodel and redesign isn't cheap; franchisees will have to spend between $300,000 and $600,000 for each restaurant. Some of the new design aspects include rotating-red-flamed chandeliers, TV-screen menus, brick walls, and industrial-inspired corrugated metal. The good news for franchisees is that Burger King restaurants already remodeled with the 20/20 design have reported increases in sales between 12 to 15 percent, and some locations that have completely rebuilt their restaurant using the new designs have had sales increases as great as 30 percent.

Ninety percent of Burger King's restaurants are franchisee owned, and by contract they are required to update their restaurant. Just like Burger King's franchise agreements, most franchise agreements require franchisees to make upgrades at certain intervals. Thus, it is a contract term that becomes vitally important to franchisees and potential franchisees when they are entering into a franchise agreement. All kinds of issues must be considered on the franchisees part; for example, what are the costs of upgrades, are the upgrades optional or required, who will provide financing if the upgrade will be costly, and what if the franchisee cannot obtain financing? An attorney experienced in franchise law can help you sort through all of these concerns and ensure you, as a franchisee, know exactly what your obligations will be.

Earlier this year, Cuppy's Coffee, a franchise founded in Florida but later moved to Alabama, simply disappeared into oblivion leaving nearly two hundred franchisees without a franchisor. A warrant for the CEO of Cuppy's, Robert Nabors, was issued in Okaloosa County, Florida, in March of 2009. Some of the investors now face bankruptcy as a result of investing hundreds of thousands of dollars in the franchise but never even getting to open their business. Cuppy's took the franchisees' money but, never built their stores. From the start, Cuppy's was a questionable franchisor; Cuppy's grew out of the failed franchise, Java Jo'z.

Cuppy's isn't the only franchisor to be hit with lawsuits in Florida; I recently posted a blog discussing The UPS Store franchisees suing UPS alleging it withheld information from franchise purchasers regarding profitability. Another franchisor sued by its franchisee is Cold Stone Creamery, which was sued by a Tallahassee, Florida, franchisee on claims of fraud related to the store's profitability.

I find the continuous stream of investors in franchises and other business opportunities who buy into risky and questionable businesses both startling and saddening at the same time. The most important thing a potential franchisee can do is research the company; that means researching other sources of information about the franchisor and not just relying on information provided by the franchisor itself. Potential franchisees can look to sources such as, franchise magazines, franchise blogs, franchisee associations, and talk to current franchise owners to find out things like what kind of support, feedback, and dispute resolution the franchisor provides. In addition before signing any Franchise Agreement a potential purchaser should seek counsel from an attorney experienced in franchise law.