What Royalties Are Owed to a Franchisor?

A Video FAQ with Mark A. Williams.

A franchisor is only owed the royalties that are set forth in your franchise agreement. Typically those royalties are going to be a percentage of sales (gross sales that you make). If you sell $100 and you owe a 5% franchise royalty, you are going to have to pay $5 back to that franchisor. That is before you pay any of your employees, before you purchase your products, so when you look at a royalty payment, it is really important to sit down and look at what all of your overhead and expenses are to see if you can still afford to operate after the royalty.

The franchise agreement might set out other types of royalties. There might be initial franchise fees, there might be royalties that are on a sliding scale based upon the amount of sales that you make or you might have different royalties if you use other franchisees in other jurisdictions to sell products and services. You really have to look at your franchise agreement and make sure you understand all the royalties or payments you will have to make to that franchisor in order to operate the business.

© 2014 Parsonage Vandenack Williams LLC

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Posted in Franchising, Starting a New Business

Nebraska Secretary of State’s Office Will Now Accept Amended Biennial Reports at Any Time

Effective July 18, the Nebraska Secretary of State’s office will allow Nebraska LLCs to correct or amend their biennial reports at any time. As a result, LLCs will be able to update public records containing their business addresses more easily. The fee to amend or correct the LLC’s biennial report is $10.00. If your business has changed locations since your last biennial report was filed, you may wish to take advantage of the new amendment rules.

© 2014 Parsonage Vandenack Williams LLC

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Posted in Business Management, Limited Liability Companies

What Happens When My Franchise Agreement Terminates?

A Video FAQ with Mark A. Williams.

When your franchise agreement terminates you have to stop doing business. That is the first and foremost thing. Whatever the brand or system that came with that franchise, you need to stop doing it. If you continue doing it there are a whole host of claims the franchisor can make against  you.

Secondly, you are probably going to be subject to a non-compete as a part of your franchise agreement, and that means not only do you have to stop doing business the way that the franchisor wanted you to, you might have to stop doing business completely in that industry.

It is really important to read your franchise agreement and make sure you understand exactly what obligations you have once you stop doing business.

© 2014 Parsonage Vandenack Williams LLC

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Posted in Franchising, Starting a New Business

What Disclosures Am I Entitled to When I Consider Buying a Franchise?

A Video FAQ with Mark A. Williams.

If you are looking to buy a franchise, you should receive something called a Franchise Disclosure Document. That is going to be a big document. Usually it comes in a 3-ring binder, almost like a book, and that is going to have the franchise agreement in it. It is also going to have a bunch of information about the operational history of the franchise. So they have to tell you things like how long they have been in business, whether other franchisees have sued them before and what kind of disputes they are in, how many franchises they have open and where they are located at. It is a document that has to be filed with the state. It is usually approved by regulators and it is there to make sure you have enough information to make an intelligent choice about whether you really want to buy into that franchise.

© 2014 Parsonage Vandenack Williams LLC

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Posted in Franchising, Starting a New Business

What Are Some Advantages and Disadvantages to Franchising?

A Video FAQ with Mark A. Williams.

There are a lot of advantages and disadvantages to franchising. Some of the advantages include that you are buying a box, something that has already been proven–a strategy, a brand, a system. You can buy into a franchise with little or no experience in that area and have a successful business because you are trading on the brand that has already been created. Now, because of that the franchisor wants some things from you. They are going to want a fee up front, they are going to want royalty payments, they are going to restrict you to only operating the business the way that they want you to. There is usually very little flexibility to go outside of their system or even to sell other products or services on the side. Once your franchise is over, once it is terminated, you usually have to stop doing that business. So once you get into a franchise, you usually have to think about staying in it for the rest of your career or selling the business.

© 2014 Parsonage Vandenack Williams LLC

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Posted in Franchising

Are All Employers Covered Under the Occupational Safety and Health Act (OSHA)?

A Video FAQ with Mark A. Williams.

OSHA is a law that is there to protect the safety of employees. If you are going to be on a roof working, we want to make sure that you don’t fall off, and that the employer is out there providing some reasonable level of safeguard. Because of that, OSHA applies to almost every single employer. There are some exceptions for certain types of industries, but what I would say to you as a small business person–you have to go into your business expecting that OSHA is going to apply to you unless you find a very specific reason why it doesn’t.

© 2014 Parsonage Vandenack Williams LLC

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Posted in Employment Law, Starting a New Business

Supreme Court Carves Out Religious Exemption to Contraceptive Mandate

The Supreme Court recently ruled in Burwell v. Hobby Lobby Stores, Inc. that closely-held businesses could avoid complying with the ACA’s “contraceptive mandate” on religious grounds. The Court focused on the fact that the government could provide birth control with no cost-sharing in a way that would not violate Hobby Lobby’s owners’ religious beliefs. For example, it could require the government to pay for birth control or shift the cost to insurers.

Experts disagree about the impact of the ruling. Some commentators argue that the ruling only applies to the ACA’s rules on birth control. Others argue that it could allow employers to refuse to cover other services on religious grounds. As the effects of the ruling become more clear, religiously-affiliated business owners may wish to explore their options when it comes to providing birth control for their employees.

© 2014 Parsonage Vandenack Williams LLC

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Posted in Benefits, Health and Welfare Benefits

Can Employers Monitor Their Employees’ Internet Usage or Read Their Emails?

A Video FAQ with M. Thomas Langan II.

Whether an employer can monitor their employees’ internet usage and emails depends on several factors:

  • The first factor is the type of employer. Employees of private companies generally have little to no expectation of privacy; however, employees of government agencies have certain constitutional protections.
  • The second factor is state law. Many states have enacted or have proposed legislation that would require employers to post notices or otherwise inform employees prior to monitoring their computer usage.
  • A third factor is a company’s internal policies and procedures. If the policies prohibit employers from monitoring computer usage, then employees have an increased expectation of privacy; however, if these policies allow employers to monitor, which most do, then an employee’s expectation of privacy decreases.
  • A final factor is the particular purpose for monitoring employees’ usage. If an employer has a legitimate purpose, for example they are monitoring customer satisfaction with emails, then employers are generally able to monitor computer usage.

Overall, most private employers are able to monitor their employees’ internet usage and emails. The best practice is that employers should check state laws, their internal policies and make sure they have a legitimate use prior to monitoring.

© 2014 Parsonage Vandenack Williams LLC

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Posted in Employment Law, Employment Policies

Should My Employee Manual Have Facebook or Social Media Policies?

A Video FAQ with M. Thomas Langan II.

The use of social media in the workplace continues to increase. To help protect your business, a good idea may be to adopt social media policies for your company.

The first thing a social media policy should do is define social media. This should include social networking sites, blogs, e-commerce sites, video sharing websites, but also leave the definition open to include future social media platforms.

Second, the policies should follow a general employee code of conduct. Here it should prohibit unlawful conduct, sexual harassment or the disclosure of confidential information on social media platforms.

Third, you should require employees to separate their workplace identity from their personal identity so when employees use social media, they should make it clear when they are representing your company and when they are representing their personal identity.

When drafting these policies, you should make it clear that it shouldn’t be overreaching or in any way hamper certain employee rights. For example, they should not prohibit talking negatively about the company or talking about wages in general as this could implicate several employment laws.

© 2014 Parsonage Vandenack Williams LLC

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Posted in Employment Law, Employment Policies, Social Media Issues, Starting a New Business

Should My Business Have an Employee Manual?

A Video FAQ with M. Thomas Langan II.

Employee manuals are not required by law, but they can be a good idea for most businesses. An employee manual serves 3 important functions:

  1.  It can protect the employer. If your company is in an at-will state, then an employee manual can make it clear that the relationship between you and your employees is at-will, and, absent any other written agreement, their employment can be terminated at any point.
  2. An employee manual can explain to employees what acceptable workplace behavior is. Here you can explain policies towards sexual harassment, discrimination, tardiness, insubordination, timekeeping, etc., while providing examples where applicable.
  3. An employee manual can explain employee rights under employment laws such as ADA, FMLA, equal employment opportunities, etc.

If  your company chooses to adopt an employee manual two key aspects are to enforce it consistently and update it regularly.

© 2014 Parsonage Vandenack Williams LLC

For more information, Contact Us

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Posted in Employment Law, Employment Policies, Starting a New Business
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