Several high profile ransomware attacks have recently rocked the franchise world fomenting uncertainty and anxiety about franchisors’ legal obligations and liability. Ransomware attacks essentially kidnap a company by shutting down its systems and holdings its data hostage until a ransom fee is paid. In addition to the quantifiable hard costs of paying ransom and hiring experts to mitigate damage and re/build cyber defenses, ransomware victims can be damaged by: (a) third-party liability to the customers and other original owners of compromised data; (b) interruption of business operations during the course of and recovery from an attack; and (c) injury to reputation value in the loss of consumer confidence, appearance of incompetence, and customer attrition. In today’s digital golden era, data is among the world’s most valuable assets, earning the tagline: “data is the new oil.” It therefore comes as no surprise that cybersecurity, which has been a hot topic for years, is garnering increased attention and resources from businesses of all sizes and stages. Yet with each new development in defensive cybersecurity, cybercriminals come up with just as many ways to get around those defenses.
Continue Reading Franchisors: Are You Covering Your Digital Assets?

vector-turkey-clipart-for-thanksgiving-dayHappy Thanksgiving. As a thank you to our valued readers, we are pleased to announce the webinar “Enforcing Non-Compete Provisions in Franchise Agreements” is now available as a podcast and webinar recording.

In Seyfarth’s ninth and final installment in its series of Trade Secrets Webinars,  Seyfarth attorneys John Skelton, Erik Weibust and Anne Dunne focused on how to implement
Continue Reading Webinar Recap! Enforcing Non-Compete Provisions in Franchise Agreements

A Florida franchisee executed a franchise agreement (FA) containing a non-compete provision and a Pennsylvania forum selection clause.  Following termination of the FA, the former franchisee’s wife opened a similar business in another part of Florida.  The franchisor filed suit in Pennsylvania against the former franchisee and his wife, and they moved to dismiss or, alternatively, to transfer the case
Continue Reading Non-Compete and Forum Selection Clauses in Franchise Agreement Binding on Franchisee Who Signed It and on His Wife Who Didn’t

It’s time for yet another meal filled with trade secrets! 

Earlier this month, New York Pizzeria, Inc., a pizzeria chain with over thirty restaurants in the United States and the Middle East, filed a complaint in federal court in Texas alleging trade secret misappropriation.  New York Pizzeria alleged that a former employee, as well as individual restaurant owners, were conspiring
Continue Reading Careful, that Slice of Pizza You’re Eating Might Be Full of Trade Secrets…

Throughout 2010, Seyfarth Shaw LLP’s dedicated Trade Secrets, Computer Fraud & Non-Competes practice group hosted a series of webinars that addressed key issues facing clients today in this important and ever changing area of law. The series consisted of five webinars: The Computer Fraud and Abuse Act: What You Need to Know, Protecting the Secrets in Your Employees’ Heads,

Continue Reading 2010 Trade Secrets Webinar Series – Year In Review

In a battle of competing noodle franchises, a federal district court in Arizona recently granted a franchisee’s motion to compel arbitration in a trade secret and breach of contract dispute with its franchisor.   

Apart from its colorful facts, the court’s ruling is significant.  First, it demonstrates that franchisors that include arbitration provisions in their franchise agreements may be precluded

Continue Reading Federal Court Sends Franchisee-Franchisor Trade Secret and Breach of Contract Dispute To Arbitration

In Atlanta Bread Co. Int’l, Inc. v. Lupton-Smith, S08G1815, 2009 WL 1834215 (Ga. Jun. 29, 2009), the Georgia Supreme Court today confirmed that in-term restrictive covenants are subject to the same strict scrutiny standard applied to post-term covenants and the same reasonableness standards of time, territory, and scope. 

The question presented in Atlanta Bread Company was whether the

Continue Reading Georgia Supreme Court Holds that In-term Restrictive Covenants are Subject to Strict Scrutiny

By Robert Milligan & Jim McNairy

After obtaining a sweeping nationwide injunction from an arbitrator that enjoined licensee Comedy Club, Inc. (“CCI”) from opening any new comedy clubs until 2019 pursuant to a trademark license agreement, licensor/competitor Improv West Associates (“Improv”) could not have been in the mood for laughs when the U.S. Court of Appeals for the Ninth Circuit
Continue Reading The Ninth Circuit’s Comedy Club, Inc. v. Improv West Associates Decision Is No Laughing Matter For Franchisors

Earlier this year, the Georgia Court of Appeals made news in Atlanta Bread Company Int’l v. Lupton-Smith, Court of Appeals Case No. A08A0348, when it struck down in-term restrictive covenants of a franchisee on the grounds that the in-term restrictive covenants did not pass the test of reasonableness applied to post-term restrictive covenants.  In this case, the franchisee had
Continue Reading Georgia Supreme Court to Review Franchise Non-Compete Case