Tuesday, March 17, 2009

Focus on Franchising

This posting was written by John W. Arden.

News and notes on franchising and distribution topics:

 A new Consumer Protection Bill would “change the legal landscape” for franchising in South Africa, according to the March 2009 Nixon Peabody LLP Franchise Law Alert. Kandal H. Tyre and Andrew P. Loewinger write that the legislation, expected to be signed into law in the next few months, would explicitly include franchisees as “consumers”; would give franchisees consumer rights, such as the right to equality, privacy, and honest dealing; and would protect franchisees from false, misleading, or deceptive representations. The legislation would provide franchisees with presale disclosure of information and the right to cancel a franchise agreement without cost within 10 business days of signing the agreement. South Africa’s Competition Act already protects franchisees against tying of products and exclusive dealing by a dominant franchisor. The new Consumer Protection Bill would prohibit these practices regardless of whether the franchisor is considered dominant. Bundling or tying of products would be barred unless the franchisor can show (1) that the bundling results in economic benefits for consumers or (2) that the convenience of bundling outweighs any restriction on consumer choice. The bill would become effective 18 months after approval by South Africa’s stae president. The Alert (“New Franchise Legislation in South Africa”) appears here on the Nixon Peabody website.

 The State Bar of California’s Board of Legal Specialization (BLS) invites California franchise and distribution law attorneys to apply for board certification as a Franchise and Distribution Law Specialist. In 2007, California became the first state to certify specialists in this area of law. There are now approximately 20 board certified franchise and distribution law specialists.

To achieve this distinction, an attorney must practice franchise and distribution law for the past 5 years, pass a written examination, fulfill certain task and experience requirements, complete continuing education in franchise and distribution law or a related area, and be favorably evaluated by attorneys familiar with his or her work. Until July 2009, attorneys who meet the qualifications outlined in the alternative to the exam rule may apply for certification without taking the exam, but must meet the remaining requirements. Once certified, these specialists will be listed on the State Bar website, and they may identify themselves as “board certified.”

The specialization examination, the first step in the certification process, will be administered in San Francisco and Los Angeles, on Sunday, August 9, 2009 from 8:30 a.m. until 5:00 pm. This exam is given every other year and will be offered again in 2011. For more information about the specialization program, visit the franchise law page of www.californiaspecialist.org. A registration form for the exam appears here.

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