Workers’ Comp – Georgia

House Bill No. 548, approved on May 1, 2012, makes Georgia the first state to adopt legislation that prohibits a franchisee from being considered an employee of its franchisor. This new law protects franchisors from liability for workers’ compensation claims made by their franchisees, but it is unclear whether the law would extend to other claims, such as tort liability. The law goes into effect July 1, 2012. The full text of the bill can be found here.

New Disclosure Requirements – Manitoba

The Canadian province of Manitoba recently passed The Franchises Act, requiring certain disclosure documents from franchisors prior to granting franchises. At least 14 days before executing a franchise agreement, the franchisor must provide the prospective franchisee with risk warnings, information about the franchisor, earnings projections (where they are provided), and financial statements (for smaller franchisors). Manitoba’s new law goes into effect October 1, 2012, and joins the Canadian provinces of Ontario, Alberta, Prince Edward Island, and New Brunswick, which already require pre-franchise agreement disclosure. The full text of the bill can be found here.

New Disclosure Requirements – Washington

The state of Washington has updated its disclosure requirements under the Franchise Investment Protection Act to better align with the Federal Trade Commission’s Franchise Rule. Senate Bill No. 6172 gives franchisors 14 calendar days prior to the signing date to provide franchisees with disclosure documents; the old rule gave only 10 business days. The law further mandates that franchisors wait 7 calendar days after unilaterally amending an agreement before signing.

FTC Announces Increases in Exemption Thresholds

The FTC recently announced that dollar thresholds for various exemptions have increased, as contemplated under the 2008 Franchise Rule amendments. The “initial required payment” threshold increased from $500 to $540; the “large investment exemption” threshold increased from $1,000,000 to $1,084,900; and the “large franchisee exemption” threshold increased from $5,000,000 to $5,424,500. These changes were announced on June 13, 2012, and go into effect on July 1, 2012.