E-mail is ubiquitous. And it is here to stay. But regardless of whether you are a luddite or “crackberry” junkie the rules surrounding the use of e-mail for commercial purposes can be confusing. Lawyer, franchisor, and franchisee alike are familiar with the relatively strait forward requirements of the CAN-SPAM Act. But the federal government is not the only e-mail sheriff in town, so to speak. In fact, there are more than 35 other state sheriffs–all of whom have laws and rules about commercial e-mail marketing.

I recently posted a blog at iMedia Connection regarding the the state anti-spam statutes. Many of these state statues are simply restatements of the CAN- SPAM Act. But more than a few go beyond the rules set by Congress in the CAN- SPAM Act and in doing so impose additional burdens on e-mail marketers. With a federal statute and no less than 37 state statutes, how should a responsible e-mail marketer approach his job? The answer revolves around who has the right to bring an action, should an e-mail marketer run afoul of anti-spam legislation.

I wrote the blog entry at iMedia Connection with e-mail marketers in mind. But given that e-mail is put used more and more by franchisors and franchisees, and the fact that these anti-spam rules impact our entire economy, I thought it might be helpful to link to it here. Spam Litigation: A Guide for E-mail Marketers

Georgia continues to be a hot-bed for franchising. Of the more than 75,000 prospective franchise owners that submitted their information to the Franchise Opportunities Network in 2009 the number submitting from Georgia ranked 5th nationally. Thus the laws related to transacting business in Georgia should be of an elevated interest to both current franchisors/franchisees and prospective franchisors/franchisees. Toward that end, one case in particular caught my attention last year.

In the case of Wachovia Ins. Servs. v. Fallon, 299 Ga. App. 440 (2009) the Georgia Court of Appeals took up the issue of whether a customer/client list was protected under the Georgia Trade Secrets Act, OCGA § 10-1-760. The facts presented at trial showed that Fallon left his job with Wachovia and went into business for himself in the same line of work. Wachovia alleged that Fallon misappropriated Wachovia’s client list and thereafter profited from the list to the Fallon’s benefit and Wachovia’s detriment.

The Court pointed out that in order for a client/customer list to be given protection as a trade secret under OCGA § 10-1-761 the information must

(A) Derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and

(B) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

Wachovia sought to obtain relief inter alia under Georgia’s trade Secret Act.

The interesting part of the opinion was the Court’s ultimate determination that because the client list was obtainable from sources other than Wachovia, Fallon could not be said to have missappropriated the information under Georgia law. Specifically, the Court held:

“In order to prevail on its claim regarding misappropriation of this client contact information under the Georgia Trade Secrets Act, Wachovia Insurance must show that the client contact information in its former employees’ Blackberries was a “list of actual or potential customers or suppliers which is not commonly known by or available to the public.” OCGA § 10-1-761 (4). The record shows without dispute that a public website titled “freeERISA.com” contains all of the information about the customers of an employee benefit broker such as Wachovia Insurance, including the name and contact information of the customer’s decision-maker. Indeed, a Wachovia Insurance representative (Benjamin) testified that “all of the employee benefits work that Wachovia Insurance Services does in Atlanta” could be obtained from this website. He described it as “a great prospecting tool to go out and find out who might be writing an account.”

Going forward franchisors and franchisees need to be aware that clients lists that they assume to be protectable under Georgia law might well not be. For if the party who “misappopriates” the client list can demonstrate that the list was readily obtainable from some other source, then the company may not have a colorable claim in Georgia under Georgia Trade Secret Act.

No one wants to spend the money to hire an attorney just like no one wants to visit the dentist. But if one is to have healthy teeth one must visit the dentist; and so to if one is to have a healthy business then one must at some point consult a lawyer.

If one’s business is a franchise then it is very wise to consult a lawyer early on in the process—be it the process of starting a franchise or buying a franchise. Franchise law is not easily labeled. It is actually a collection of many different types of law –including agency law, ant-trust law, employment law, contract law, administrative law, trademark and patent law, debtor/creditor law, tort law, trade secrets law, financial services law, and international law.

Everybody loves a good lawyer joke. And people have coffee mugs adorned with the Shakepearean quote: “The first thing we do, let’s kill all the lawyers.” But the fact of the matter is that what everybody loves even more than a good lawyer joke is to be secure in the knowledge that he/she has a good lawyer. Lamentably the cost of legal services has risen significantly in the last decade. This has driven some people to take a pro se approach to their legal needs. Undoubtedly this pro se approach works for many. What is also equally true is that it does not work for a great many others as well. And the aggregate cost to those who failed to spend money on the front-end in forfeited rights and missed business and legal opportunities dwarfs the amount of money that was “saved”. Read the rest of this entry »

What does the does the arcane socio-economic philosophy of Distributism and the business system of franchising have in common? On the surface it would appear that not only are the two concepts not philosophically similar, any comparison between the two is akin to comparing apples and oranges. Upon further examination of the central tenets of the two, however, it is clear that there are some areas in which the two systems have striking similarities. In fine, the system of franchising has as its bedrock many of the same principles that underlay Distributism. This essay briefly sets forth similarities between the two systems and the importance of recognizing these similarities.

America is experiencing a re-assessment of the belief that laissez-faire, free market capitalism is an unalloyed good. With the collapse of the capital markets in the Fall of 2008, it is beyond peradventure that a certain amount of state controlled economic governance is likely to be the result of what some are calling the “Second Great Depression”. Many on the Left are saying that a critical investigation into the merits of the Austrian school of economics that has held sway over our public policy since the early 1980’s is long over due. While many on the Right say that the problem is not with free market capitalism it is that free market capitalism has not been thoroughly tried; that we have had state intervention in the economy in some form or fashion since the last Great Depression. Read the rest of this entry »

Joel Waldfogel, a University of Pennsylvania professor, has written an interesting and controversial little book called Scroogenomics. His central premise is that every holiday season we Americans waste about 12 billion by buying gifts for people who place a value on the gifts that is less than what we actually paid for the gifts. How he goes about calculating this figure is simple, if somewhat controversial. The crux of his theory revolves around the economic concept of “dead weight loss”. Looked at from a macro-economic perspective dead weight loss is the cost to society created by inefficiency in the market. Professor Waldfogel posits that this waste occurs because “when other people do our shopping, for clothes or music or whatever, it’s pretty unlikely that they’ll choose as well as we would have chosen for ourselves. We can expect their choices, no matter how well intentioned, to miss the mark. Relative to how much satisfaction their expenditures could have given us, their choices destroy value.”

He triumphantly makes his point by closing the above paragraph with “Take that, Santa.” Read the rest of this entry »

Welcome to the New FranchisingLaw.com. As with the old format, we will continue to provide information for both franchisor and prospective franchisee. In addition, we will be blogging about all things related to franchise law. What exactly does that entail you ask? Well, FranchisingLaw.com aims at being a repository of information and insights on all aspects of franchising. As franchising law is not one type of law but rather a collection of many different areas of the law so to does Franchising Law aspire to explore the myriad disciplines that comprise franchising.