Kevin Brendan Murphy's Answers

Franchising A Business in California

As a franchise attorney, I can say the exemption you are referring to is the "Experienced Franchisee" exemption under Section 31106 of the California Franchise Investment Law. The exemption can apply if any of the following three conditions exist: (1) One or more of the owners of the prospective franchisee owning at least a 50 percent interest in the prospective franchisee meet both of the following: (a) The owner or owners have had, within the seven years before the date of the sale...

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Our franchise attorney says we need to file paperwork with the California Dept. of Corporations?

The advise you received from your franchise attorney is sound. California is one franchise registration state that regulates a "material modification of an existing franchise." The requirement is contained in Section 31125 of the Franchise Investment Law found in the Corporations Code. The regulations at 310.125 describe the various exhibits to be attached to the application for material modification under Section 31125. See Exhibit 1, for example: "Describe the proposed modifications,...

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Professional athletes last name on t-shirts for commercial use.

So, you're trading on the reputation of well-known players, selling t-shirts, and ask if there's any chance of getting sued? Use just a little common sense. Those guys make mega-bucks endorsing things. Do you really think they'll let you trade on their names for free? You'll get sued in a heartbeat as soon as you're discovered. Kevin B. Murphy, B.S., M.B.A., J.D. Attorney at Law Director of Operations - Mr. Franchise FRANCHISE FOUNDATIONS APC

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Franchise attorney question

You should show the email, your contract and proposed amendment to a franchise attorney. In virtually all franchise contracts, to change provisions requires an amendment signed by both parties. The franchise company can't "require" anyone to sign the amendment - it has to be agreed upon by both sides. As your post says your are all in California, our state's Franchise Investment Law provides additional protection. Before the franchise company can even send you the proposed amendment, they have...

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Can a franchise be investigated for fraud?

As a franchise attorney, I basically agree with the other attorney answers but add the following. Being five-years out, you likely have significant statute of limitations issues on the contract (and on any disclosure violations in the then-called UFOC). If the company is still selling franchises with an 80% failure rate, what does that tell you about the due diligence and intellect of their franchise buyers? You can complain to the FTC, which administers the federal franchise rule. They were...

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Protecting My Recipe

As the other attorneys note, trade secret is a good (and probably best) way to protect your recipe. Like KFC's "secret herbs and spices" and the formula for Coca-cola, for example. Of course, someone can always try to "reverse engineer" your final product to try and figure what's in there, proportions, etc. On another note, you usually can't just make food products at home for resale to restaurants. There are various codes and permits to look into - like a commercial kitchen, etc. Best of luck....

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Franchise Earnings Information

Welcome to the realities of franchise regulation. Although franchise companies get regular monthly profit and loss statements from their franchise owners, and know to the penny how much they are making (or losing), they are not required to disclose this information in Item 19. Due to extensive lobbying by the franchise industry, the decision to disclose how much their franchise owners are making (or losing) is entirely optional. They can tell you, but only if they want to. Blue chip...

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Do I have any responsibility/obligation to an assessment by Franchise Tax Board after California Probate is completed/discharged

Adding to what the other attorney says, Section 9202 does not say the Franchise Tax Board has 4 months to file a claim. It says the the Director of Health Care Services has 4 months after notice is properly given to file a claim (for health care services, if these were provided to your mother). You really need to sit down with a probate attorney and review everything. As the song goes, the Tax Man usually gets things sooner or later. Good luck! Kevin B. Murphy, B.S., M.B.A., J.D. Attorney...

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I dissolved my California S-Corporation in Feb 2012, do I still owe the $800 CA Franchise tax fee for 2012?

As a franchise attorney I agree with the other attorney answers. Just having "very few transactions" on the books for January is not a defense to paying the minimum $800 due. And a corporation must pay the minimum franchise tax even if it is not operating, has zero business, etc. Consult with a business attorney in your area for specific advice, and good luck. Kevin B. Murphy, B.S., M.B.A., J.D. Attorney at Law Director of Operations - Mr. Franchise FRANCHISE FOUNDATIONS APC

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Is it legal for somebody to take your idea and host their own festival?

Are you really serious? I mean, the idea of a "music festival" is about as unique as Apple Pie, Neighborhood BBQ's, Thanksgiving and Christmas. Did you really think you had a monopoly on your "idea?" After all, in these trying economic times, jobs are hard to find, so consider yourself lucky. Of course, consult with a good IP attorney in your area for specific advice on fighting back weapons. Maybe you have an iron-clad agreement with our investor(s), who knows? Good luck, I think you'll need...

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