The Kentucky Supreme Court overturned an appellate court’s ruling providing disability benefits to an employee of an uninsured franchisee.  The court also said the state law doesn’t apply because the franchisee “did not perform a regular or recurrent part of (Doctor’s Associates’) business.”  Subway’s franchising agreement required franchisees to maintain coverage for workers compensation claims yet the restaurant owned by Watash UBC did not have insurance at the time of the employee’s injury in May 2000, reports BusinessInsurance.com.

Doctor’s Associates Inc., the franchising company for Subway restaurants, can’t be held liable for workers compensation claims stemming from an uninsured franchisee, the Kentucky Supreme Court has ruled.

The Kentucky Uninsured Employers’ Fund had sought payment from Milford, Conn.-based Doctor’s Associates for medical and temporary total disability benefits it paid to the employee of a Subway restaurant in Whitesburg, Ky.

The restaurant, owned by Watash UBC, did not have workers comp insurance at the time of the employee’s May 2000 injury, even though Subway’s franchising agreement required Watash to maintain coverage, according to court records.

An administrative law judge and the Kentucky Workers’ Compensation Board dismissed the Kentucky Uninsured Employers’ Fund claim, saying that franchisors can’t be held liable for uninsured franchisees under Kentucky’s workers comp law.

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Larry Lundy whose franchise was ranked among the 100 largest minority owned businesses in the United States in the 90s is facing storm after storm in his business.  In 1999, he was diagnosed with leukemia and while undergoing treatment, his franchise stores was mismanaged by the staff.  As he got better in 2004, things started to turn around but the following year, Hurricane Katrina delivered him a crippling blow.  He salvaged only 44 out of his 67 stores.  He lagged behind in royalty payments and other obligations and with Pizza Hut working against him, Lundy decided to sell his franchise back to the latter.  And thus began his legal battle with the franchisor. You can read more on this at BlueMaumau.org

Veteran franchisee Larry Lundy has been no stranger to hardship, tragedy and setbacks in his three-decade career with Pizza Hut Inc. After being diagnosed with chronic myelogenous leukemia, his treatment for the rare cancer threw him into a spiral of bankruptcy restructuring of his 67 stores. Lundy landed on his feet, only then to be hit by Hurricanes Katrina, Rita and Gustav.

Through it all, the franchisee managed to stand firm, rebuilding his business in his native community that he loved, New Orleans.

Then came another blow. This one from his own franchisor, under the management of Yum Brands. When Pizza Hut began showing signs of wanting to take back the corporate-owned stores they originally sold Lundy, the relationship started to deteriorate. Lundy fought back tooth and nail, but finally succumbed when the franchisor took advantage of an opportunity to withdraw its guaranty on Lundy’s loans.

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If businesses don’t work out as expected, stakeholders have the tendency to look for someone to blame – this scenario is common when it comes to franchising.  Catching and addressing the dispute early on will prevent a full-blown litigation.  Andrew Caffey provides tips on how to prevent franchisor-franchisee disputes in the following AllBusiness.com article.

One of the most intimidating aspects of franchising is the prospect of litigation. Franchising has a well-earned reputation for being litigious, and the franchisor-franchisee relationship is in many ways a breeding ground for disputes. Consider: An individual invests a large amount of money in operating an unfamiliar business; the franchisor business undertakes the responsibility of training the new owner and helping him or her make the business a success. If the business doesn’t work out, fingers are pointed and lawsuits fly. And while litigation is expensive and disruptive for everyone, the franchisor pays an extra price: All lawsuits must be disclosed in the franchise disclosure document for 10 years.

Franchisors have been watching this movie unfold for a few decades now, and have developed a variety of innovative techniques to help them manage or head off serious disputes with franchise owners. Here are some tools that franchisors should have in their arsenal.

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Pizza Hut filed a lawsuit against Lundy Enterprises, a corporation of Larry Lundy who owned 44 Pizza Hut restaurants, for royalty payment default.  Lundy counterclaimed that “Pizza Hut imposed unfair credit terms, refused his restaurants the chance to offer new products available in other markets and, over time, opened independent stores that became his competition”, according to Nola.com.  Amidst this legal rambling, Pizza Hut has reopened stores and employed 500 staff in affected areas.

The proverbial brick oven of justice is beginning to heat up for Larry Lundy, the New Orleans native and former Pizza Hut magnate who was forced to shutter his 44 restaurants earlier this year after years of souring relations with the Dallas-based pizza chain.

Starting in the mid-1980s, Larry Lundy rose up the corporate ranks at Pizza Hut’s headquarters in Kansas. In five years, Lundy became the highest-ranking African-American in any national restaurant company, he once boasted in an interview.

Lundy owned 44 Pizza Hut restaurants, including 11 New Orleans-area locations, that closed after the pizza chain filed suit Jan. 3 against his company, Lundy Enterprises, claiming it had fallen behind on royalty payments.

Pizza Hut and Lundy Enterprises, which had 1,200 employees across 64 stores in south Louisiana at its height a decade ago, spent much of last year in arbitration. Both sides reached a deal that would have transferred Lundy’s assets to Pizza Hut, records from the U.S. District Court for the Northern District of Texas show, but the value of the assets, pegged at $7.8 million, was not enough to pay off all liens, claims and other expenses.

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Equal Protection Under the Law
Laws are generally in place within a society to provide protection for the citizenry.  There are many areas of law, with criminal and civil as the two main categories.  However, there exist many subdivisions and specialties within each class, and legal experts in one discipline may not know a great deal about some other discipline.  Franchise law has evolved over the years to protect franchise buyers and ensure that rules and regulations throughout the industry are fair and open.  A franchise law firm generally finds its clients within two distinct groups – individuals who are interested in buying a franchise, and companies that wish to start a franchise operation.  There is even an area known as franchise investment law, where some states require franchises to be registered before they can be bought or sold.  A competent franchise law attorney is a valuable commodity for any party involved in franchising.  He or she should be well informed on new franchise law developments as well as existing case law.

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Investing in the United States from Overseas
Depending upon the state of the U.S. dollar and its relative value against various foreign currencies, overseas investors may find that putting their money into U.S. investments will grant them a very favorable rate of return.  For foreign nationals who wish to take this path, the U.S. government asks that they apply for an E-2 visa.  This is a special document that allows someone from outside the United States to make a domestic investment and also relocate there for a period of time.  For non-U.S. citizens with money to spend, this can be one of the easiest ways to end up living and working in the United States.

E-2 Visa Requirements
An applicant for an E-2 visa must be a legal resident of one of the countries with which the United States enjoys a treaty of commerce.  It is called a “non-immigrant” visa because it does not guarantee the holder a direct path to U.S.

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Protection for Franchise Buyers
Once you have decided that buying a franchise is the right business move, and after you have done proper due diligence to choose a field or industry to enter, it comes time to wade through the vast amounts of paperwork supplied by the prospective franchisors.  Few people are able to do this on their own.  Don’t forget, you are making a huge investment in both time and money to buy a franchise.  Even if your only concern is in understanding the franchise agreement and other material that will legally bind you together with the parent company, spending a few thousand dollars at the beginning of the relationship could save you many times more than that during the time you spend as a franchise owner.

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Personal Liability
We all have responsibilities when it comes to living in a society.  If you own a home, you must maintain it properly to avoid affecting the value of other properties in your neighborhood.  If you drive a car, you must operate it in a reasonable manner to make sure you are putting no one at risk of injury.  If you own a company, you must conduct business in a fair and safe manner.  Failing to abide by these societal expectations can cost you, both personally and professionally. The purpose of insurance is to protect the person or the business entity from financial harm.

Business Insurance Plan
Owners of a business should have a plan to protect the assets of the company as well as those of the individual owners.  While there are many types of insurance for small business, here are the primary categories:

• Property insurance
• Liability insurance
• Health insurance

Business Property Insurance
Property insurance offers protection against loss or damage, whether by theft, natural disaster, or accident.  A policy will protect both the physical building and its contents, and most insurers will cover items that are lost or stolen even after they have been removed from the premises—a laptop computer that accompanies you on a business trip, for example.

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The Crux of an Idea
There is an old saying that goes, “The world will beat a pathway to your door to buy a better mousetrap.”  The opportunity to cash in on an invention is one of the top dreams an entrepreneur can have.  All it takes is thinking up something useful that no one else has built.  But having an idea is a far cry from earning big bucks from its sale.  There are a number of steps one must follow to reach that goal.

What is a Patent?
A patent is defined as the exclusive right to control an invention.  Once a patent has been issued, the owner can prevent anyone else from using it, manufacturing it, or copying it without permission.  There are three basic patent types – utility patent, design patent, and plant patent – with each covering different methods and lasting for different lengths of time.  A utility patent is usually good for 20 years and covers machinery and processes.  A design patent is usually good for 14 years and covers a particular design that does not fall under the previous description.  A plant patent is usually good for 17 years and refers specifically to an inventor who has developed a new type of vegetation.  Generally speaking, once the period of a patent has expired, the item becomes public property.

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So you want to buy an accounting or law firm?  There are many details that you will need to attend to in order to take over a law firm for sale or other type of legal business for sale.  Locating a CPA firm for sale or accounting companies for sale can be quite a challenge.  However, it is not impossible and you can be quite successful in this industry.

Legal Background
It is important to have some sort of legal background before you even begin to think about finding a legal service business for sale or buying a law firm.  If you do not know the workings of the legal system, you will have trouble making the best decisions for the firm and to operate it efficiently to make a profit.

Accounting or Business Background
If you want to buy a CPA firm for sale or other accounting companies for sale, it is important to have an accounting or business background.  This will ensure that you can make operate and run the new company with the ease and with profitability.

Finding a Law Firm
Finding a law firm may be somewhat difficult.   Typically not a large number of firms go up for sale.  Most law firms that are established are usually operated and run by a partnership.  If one person wants out of the partnership, the other person traditionally continues the legal practice.

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A trademark search can, in actuality, be many different things. In theory, a trademark search is performed to determine whether or not the mark you are hoping to use is already taken by another. This allows an individual to apply with a greater level of confidence for the use of a trademark with the United States Patent and Trademark Office (herein referred to as the USPTO). A trademark search is, ideally, a comprehensive, analytical way of researching a name, slogan or logo for prior use.

A trademark search can also be performed in a sloppy and ineffective manner, and may not protect you from potentially infringing upon another’s name or logo. This is why it’s important to ensure that the trademark research you have commissioned is done comprehensively and thoroughly!

It is not unusual for a trademark research company to charge hundreds of dollars for searching the USPTO, which you can do for free. Comprehensive research firms search Federal, State and Common Law records, which is a more logical and thorough way to research your name. When commissioning research on your name, it is important to ask the company you’re considering using to clarify what exactly their searches entail, each step of the way.

Companies may try and save money in other ways, including letting you pour through the raw data they collect without any summary of what it all means. It is important to be sure once you’ve decided to commission research on your name, that the information is compiled into an easily readable report. Examining the results of your research can sometimes be difficult, even when placed in an edited report. If you’re left to decipher the meaning of a company’s raw data, chances are you may under react or overreact to the results.

When searching your name, it is important that phonetic spellings of the name are searched, as well as vowel variations.

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At one point or another, we’ve all seen a product or business name with a small, encircled R floating next to it. You’ve probably wondered what this R symbol really means, and how exactly it got there in the first place. Most people will tell you that it means something to the effect of “registered,” but that’s only a small part of the significance behind the circled R.

It’s correct that this symbol does imply the term registered, but registered with whom, and how?

A “registered trademark”, or ®, refers to a name, slogan or logo that has been officially registered with the United States Patent and Trademark Office (USPTO). Registering a trademark is beneficial to a business because it publicly states that your trademark is registered with the USPTO and therefore, you have exclusive rights to that name within your industry. This means that if your business had a registered trademark, and you found another business of a similar nature utilizing your name or logo, you would *likely have the legal right to use your name!

Each time an individual applies for a trademark, the USPTO performs a cross reference check of their name and/or design for similarities among Federally registered or pending trademarks ONLY. The USPTO search is lacking in State trademark AND US National Common-Law databases. Because the USPTO protects names in this fashion, you do not run the risk of another business utilizing and possibly soiling the reputation of the company that you worked hard to build!

Once you have applied for your trademark, the USPTO will consider it a pending mark for up to 18 months. This is among the many reasons why it is important to apply for your trademark sooner versus later. The sooner you apply, the sooner it is that you will be doing business under a registered, protected name!

*This is dependent on if the name is truly available at the time of filing.

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CEO’s and business leaders of growing companies inside and outside the Beltway are guilty of committing a very serious strategic sin: the failure to properly protect, mine and harvest the company’s intellectual property. From 1997 to 2001, billions of dollars went into the venture capital and private equity markets and the primary use of these proceeds by entrepreneurs was the creation of intellectual property and other intangible assets. In many cases, five years later, however, emerging growth and middle market companies have failed to leverage this intellectual capital into new revenue streams, profit centers and market opportunities because of a singular focus on the company’s core business or a lack of strategic vision or expertise to uncover or identify other applications or distribution channels. Investors and tech executives may also lack the proper tools to understand and analyze the value of the company’s intellectual assets. In a recent study by Baruch Lev at NYU, only 15 % of the “true value” of the S&P 500 was found to be captured in their financial statements. This gap in capturing and reflecting points out the critical need for a legal and strategic analysis of on emerging company’s intellectual property portfolio.

To begin uncovering hidden value, entrepreneurs and senior executives of growing companies should go through the process of an intellectual property audit.

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“Cash is king!” And, running out of cash is the most common reason that businesses fail.

This article is about practical tips to reduce your risk that slow or late-paying customers will cause a cash crunch in your business.

Finding out that a customer for whom you’ve just done a large project has gone into bankruptcy is bad news.

Here are some practical tips to avoid collections problems.

Tip 1. Put it in writing.

Contracts are important! The contract should clearly define the scope of work and payment terms. It should also clearly define the responsibilities of each party, including things you may not think of, such as permits and fees, necessities like scaffolding or temporary heat, and even responsibilities for trash removal may be clearly stated in the contract. When it comes to contracts, the more you define in advance, the better off you’ll be. If you have your agreement in writing, you are much better positioned to pursue your legal remedies if the customer doesn’t pay.

Tip 2. Accelerate the receipt of cash.

Require deposits or payment up front. Accept credit cards. Insist on ‘payment on delivery.’ Offer incentives for prompt payment (e.g., 2% discount if paid within 10 days). Be cautious about extending credit. Check credit history. You may even want to implement the use of a credit application with a personal guaranty. Ask for references.

Subcontractors and sub-subcontractors should be wary of the “pay when paid” clause, which would condition payment to you upon receipt of payment by the General Contractor from the Owner.

Tip 3. Set up a system.

Invoice promptly. Set up a system and follow up promptly on all late payments.

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The process of selling or buying a business is an extremely time consuming one that requires an awful lot of paperwork and legal wrangling. It can take months to finalize a deal as a direct result of the negotiations. During that time, the sale or acquisition of the entire business often rests on the negotiations as to what the final price includes. As such, when you are either selling your business or buying another one then there are several legal documents and contracts you will come across during the course of the sale or acquisition. One such legal document is an asset purchase agreement.

What Is An Asset Purchase Agreement?

An asset purchase agreement is an essential legal document that should be factored into every single business sale or acquisition. This is because it outlines in detail what assets are included in the sale or specifically excluded from the sale. Assets can include anything that is vital to the functioning of the business or is considered an asset. This includes furniture, property, office equipment, computer systems, technology, office supplies, services, contracts, contacts and indeed anything else that the business actually has at any given time.

It is important to have a legally binding asset purchase agreement in place because it protects both the buyer and the seller from legal proceedings at a later date. Having the best interests of both in mind, anything that is on the agreement must be transferred so the buyer is getting exactly what he or she wanted.

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Businesses, meaning corporations or partnerships, have two options in filing for bankruptcy:  Chapter 7 and Chapter 11.   (Individual self-employment businesses can also potentially file under Chapter 13)  Both have their advantages and disadvantages.

Chapter 11

Chapter 11 is designed for businesses that seek to remain operating and wish to “reorganize” their debts.    Depending on how the corporation is structured, how the debts are allocated, the value of all assets–both tangible and intangible–a plan can be proposed that repays anywhere from zero to 100% to unsecured creditors.

Chapter 11 also provides the ability to break leases and contracts, and enter into new ones more favorable to the business.  This can be particularly helpful if the lease for the premises on which the business operates is burdensome and causing profits to suffer.

Chapter 11 is, however, very involved and expensive.  In order to keep expenses down (as much as possible) and promote successful reorganization, it is important to seek professional counsel as early as possible to allow sufficient time for pre-filing planning and structuring.

Chapter 7

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During the course of the sale of a business, you will need to find out exactly what documents are needed and when they will be needed. There are a lot of legal processes involved and skipping or failing to carry out one of these areas properly can be disastrous for your future plans. Escrow documents are just one of the types of documents that you will always come across. They are vital when selling or buying a business because they are fundamental for the transaction to legally occur. They also ensure the fulfilment of both the seller and buyer’s right to change his or her mind. As such, escrow documents are a must.

What are Escrow Documents?

Escrow documents are the documents that govern the final payment structure or arrangement for the business to move from the seller to the buyer smoothly. Escrow is an important period of time because it is the last chance both buyer and seller have to formalize their agreement. There are various functions that take place during this time, but all arrangements are specified in the escrow documents.

Escrow documents detail the amount of money that has been placed in the hands of a third party, which is usually a broker or a licensed escrow agent. It also stipulates when the escrowed funds are to be released and to whom, as well as any payment schedule that may exist. It may be that the seller has agreed to pay the buyer in instalments as each part of the transaction has been completed. It may be that so much is held back until 6 or 12 months down the line. This is determined in negotiations and then recorded in the escrow documents.

The main item of importance that is contained within the escrow documents though is the sale terms.

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My first job after graduate school was working for the federal government in the Office of Personnel Management (OPM). A few months into the job, a woman air traffic controller sued her boss and co-workers in the Federal Aviation Administration (FAA) for creating an offensive, intimidating and hostile work environment at the tune of $1 million dollars. She alleged that they sent pornographic photos across the screen of her computer while she was monitoring the safety of airplanes in flight and during landings. OPM mandated sexual harassment training for all supervisors and managers in the FAA and I designed and conducted the first-ever sexual harassment training for federal employees. That was in the 1980s. Fast forward twenty years and the workplace is still rampant with sexual harassment claims and lawsuits.

On January 9, 2006, the largest sexual harassment lawsuit ever, at $1 billion dollars, was filed in Manhattan against Dresdner Klienwort Wasserstein Services, the American branch of Dresdner Bank of
Germany. The complaint cites lewd behavior toward women, entertainment of clients at a strip club, and examples of reduced opportunities for women who returned to the job after maternity leave. This suit makes it clear that sexual harassment occurs in all types of companies and at all levels of business.

Sexual harassment in the workplace presents an ongoing and growing risk to businesses operating in the United States. From a purely business perspective, an organization stands to gain if it acts proactively. Not only is it the right thing to do, it is the smart thing to do. Here are five tips for eliminating sexual harassment in the workplace.

Act before a problem occurs.

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