July 2010 Archives

Erin Andrews Lawsuit over Nude Video Tape

By Michael Webster on July 21, 2010 9:28 AM | 2 Comments
ESPN reporter Erin Andrews filed a lawsuit Thursday against Ohio State doing business as the Blackwell Inn for negligence, emotional distress and invasion of privacy as part of a larger suit against two additional hotels and the man that published nude footage of the television reporter last year.


The lawsuit is interesting because in part because of the simple facts.  Erin Andrew's stalker was able to obtain information from the hotel where she was staying, get her room number, and book a room right beside her.  How could this happen?  No doubt the depositions on this will prove fascinating.

But the incident shows again the problems that any franchisor and franchisee have: how to divide the responsibilities up for upholding compliance with privacy standards.

Erin Andrews has advanced a number of theories in this case for franchisor liability, agency, co-venturers, and community interest.

The franchising world will be watching this case unfold with great interest.

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Franchisee Satisfaction - Independent Rankings

By Michael Webster on July 13, 2010 2:39 PM | 0 Comments
Jeff Johnson of Fran Survey has a short executive summary of their recent review of franchisee satisfaction at Comfort Keepers.

"The survey asked Comfort Keepers franchisees to rate their franchisor through a series of questions regarding overall growth potential, quality, support, communication, and other important areas. 

The results, according to Johnson, show that Comfort Keepers has an enthusiastic, energetic franchisee community of which 92 percent agree that their franchisor understands that if the franchisee is successful, they will be as well. 

According to the FranSurvey system, Comfort Keepers achieved a positive rating from 94 percent of its new franchisees for 'initial opening support,' while 95 percent rated the 'initial training' provided by the franchisor as positive. 

"It takes a quality franchise system to achieve this high level of results," added Johnson."

I would encourage individual interested in this system to spend the $25.00 and obtain the entire survey. 

Then my preference would be to de-construct it by focusing on only two answers: the best and worst.  Aggregating survey answers is often misleading.  The difference between awarding a franchise a top mark, say a 5, versus the next top mark, say a 4, is very large.  Looking a raw scores of best/worst and how they vary overtime gives a broader view of franchisee satisfaction.

Franchisee satisfaction surveys should be conducted by the independent franchisee association as another method of gaining valuable intelligence with which to communicate to the franchisor. 
 
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2 Important Changes in Franchise Dispute Resolution -

By Michael Webster on July 9, 2010 10:47 AM | 0 Comments

Michael Millerick, correctly in my opinion, notes that the passage of the Fair Arbitration Act which bans mandatory arbitration in franchise agreements is more likely to pass because of the Supreme Court (US) decision in Rent-Center v Jackson, which allowed the arbitrator to take jurisdiction over the question whether there was an agreement to arbitrate or not.



"Two significant events have, and are occurring, which will change the entire landscape concerning how franchise disputes are going to be resolved. 

 
Over one half of existing franchise agreements include arbitration clauses which require franchisees and franchisors to resolve most of their disputes where the franchisor's place of business is located and before professional arbitrators who presumably have experience dealing with the same types of issues on repeated occasions. 
 
Some find this comforting and cost effective while others think it unfairly favors franchisors. 
 
Reacting to the "consumer" oriented nature of the franchisees' complaints - usually prompted by those who have lost their disputes in arbitration - the U.S. Legislature now has before it two pending bills which will invalidate all arbitration clauses in existing and future franchise agreements as a matter of law. A recent event has made the passage of these bills even more likely."
 
In New Brunswick, the passage of the Mediation Regulation, under the New Brunswick  Franchise Act, which comes into force on February, 2011, now provides for a type of mandatory mediation for franchise disputes.
 
One party can ask for mediation, and the other party has 7 days to decline the request and provide written reasons for doing so, section 4 of the Mediation Regulation.
 
Although the regulation does not specify the cost consequences for declining mediation should the dispute become a legal procedure, I can imagine a Judge being interested in substantive reasons for declining mediation.  
 
If you are a franchise mediator, it might be a good time to hang out your shingle in New Brunswick.
 
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