What better place to start the initial SGR newsletter on estate planning and wealth protection techniques than with a discussion of basic estate planning principles? For most of you, this article will serve to remind you of the fundamentals on which your estate plan has been built. For others, it may provide the building blocks for the construction of your estate plan. JUDICIOUS USE OF THE APPLICABLE CREDIT AMOUNT (“ACA”) IS A CORNERSTONE The ACA, formerly known as the Unified Credit, is currently $3,500,000, and represents the amount of property that each person can pass to his or her beneficiaries… Read more

Here is a checklist of what a trade or professional association should consider protecting with copyright or trademark. Other taxexempt organizations, including charities, educational institutions, and hospitals can also use the list. We’ll start first with copyright. Although recent legislation has reduced the need to mark materials with a copyright symbol, we still think it’s a prudent practice. The notation form is “© [Date] [Organization Name]”: © 2011 ABC Association. If you think there’s a realistic danger that someone might copy the materials — say, a competitor copying drawings used on your website or in your consumer brochures — you… Read more

Issued in 1972 and revised in 1980, the Federal Trade Commission’s (FTC) Guides Concerning the Use of Endorsements and Testimonials (Guides) in Advertising assists with compliance and enforcement of deceptive advertising practices. Now, for the first time in almost 30 years, the FTC has issued substantial revisions to its Guides which became effective on December 1, 2009. As a result, trade associations and their members need to review their use of endorsements and testimonials in advertising and adopt the changes made necessary by the final version of the Guides. The general considerations behind the revised Guides are as follows: Endorsements… Read more

In a Technical Advice Memorandum earlier this year, the IRS declared an athletic trade association liable for unrelated business income tax (UBIT) in connection with the association’s discount certificate program. This declaration came after the regional trade association administered a system of discount certificates, and sports facilities (let’s say, proprietary golf courses) agreed to discount fees deeply to holders of the certificates. Players could buy the certificates from sports facilities or from the trade association itself. As a result, the trade association derived substantial income from the certificate program, in fact noting at a meeting that the program provided a… Read more

California Assembly Tables “Fair Franchising” Bill The “Level Playing Field of Small Businesses Act” failed to gather the requisite votes to move past the California Assembly’s Business, Professions and Consumer Protections Committee. The controversial measure would have greatly extended protections to franchisees, but gathered significant opposition from franchisor groups including the International Franchise Association. While the measure will be tabled for now, we expect similar legislation to be reintroduced in the future. The bill received four votes in favor, three votes against, and two abstentions. For a summary of the proposed legislation, see the previous issue of our Franchise Law… Read more

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… Read more

Motor Vehicles – California A new California law, effective January 1, 2012, prohibits motor vehicle manufacturers from obtaining or enforcing against dealers any agreement that modifies or disclaims any of the manufacturer’s duties or obligation. The law also requires that manufacturers provide notice to the California New Motor Vehicle Board any time it changes an ownership interest. Motor Vehicles – New York A recent amendment to New York’s motor vehicle dealer law prohibits franchisors from requiring that dealers make monetary contributions to any franchise program or promotion without first receiving the dealer’s written consent to participate in such program.

Business Opportunity Rule The Federal Trade Commission (“FTC”) has released its final amended Business Opportunity Rule, which regulates the offer and sale of business opportunity ventures. Examples of such business opportunities include vending machines and rack displays. The rule, which is similar to the FTC’s Amended Franchise Rule, imposes disclosure and sales method requirements for such business ventures. Unlike franchises, business opportunity ventures often do not involve the license of a trademark. Furthermore, business opportunity ventures are typically less expensive and involve simpler contractual agreements, resulting in less financial risk to purchasers. Thus, since 2007, business opportunities have been regulated… Read more

International Franchise Expo Registration Exemption The New York Attorney General’s Office has created a new franchise registration exemption for its upcoming 2012 International Franchise Expo. This three-day exemption will allow franchisors that are not registered in the State of New York, as well as international franchisors that do not have the required Franchise Disclosure Document (“FDD”), to attend the trade show and promote their opportunities to attendees. Unregistered franchisors are prohibited from selling franchises at the show or providing copies of their FDD. In addition, an unregistered franchisor must display a sign explaining that, if the franchisor decides to establish… Read more