Tag Archives: corporate lawyer

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Banks Without a Remedy for Fraudulent Check Cashing Scheme?

In a recent Seventh Circuit Case, the dangers of a bank cashing a fraudulent check based on an electronic image raises important business banking concerns.  In a recent Commercial Banking Law Case, an attorney’s client Fumiko Anderson asked attorney Goodson … Continue reading

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Gender discrimination in Silicon Valley and the Startup and VC Industry!

Gender discrimination may be more prevalent in Silicon Valley, the Startup and VC culture than most realize.  The reality is that most partners, VCs and Startup CEOs are men.  The Ellen Pao trial has brought these issues to light, but … Continue reading

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Business Owners, Small Franchisees, and Franchise Operators and breach of contract and fraud claims!

It is common place for there to be disputes between Franchisees and Franchisors. Often times, the dispute involves continued use of trademark licenses without paying royalties, claims of fraud involving financial information, and breach of contract or the franchise agreement.  However, there is some measure of protection from the unhappy or disappointed with their purchase of a franchise or a franchise store.  The franchisee often claims that the financial ;projections of the past performances of the franchise stores or operators.

There is often disagreement about what financial information was provided by the Franchisor and how much of it is mere puffery, opinion or an accurate reflection of the historical performance of different franchise stores.   However, in a recent Ruling the Illinois Appellate Court for the First District provided a finding that allowed Ace Hardware to defeat the claims asserted by Avon Hardware.  Avon Hardware asserted that Ace Hardware was liable for providing fraudulent or misleading sales and financial information to Avon Hardware.

Ace Hardware was found to have provided a variety of opinions and financial information to Avon Hardware, but was found to be not liable to Avon Hardware.  The primary reason for the First District Court’s dismissal of the common law or statutory fraud was the inability to overcome the language in the parties’ Franchise Agreement cautioning about the financial and sales data and the opinions contained therein.  The First District Court dismissal of the fraud claims were based on the Franchisees failure to plead and prove materiality and reasonable reliance on the Financial Sales and Data.

Thus, it is crucial for Franchisees to make sure that they verify sales projections and ensure that the Franchisor is required to provide audited financial and sales data.  This will help curtail the risk of being provided unnecessarily inflated financial information and sales data.  Moreover, it will help ensure that you do not have Buyer’s remorse.   Of course, if you have any concerns or questions, then please contact us at http://www.vrplaw.com

How to grow your business and manage business and legal risks? How to make your business more attractive to Investors?

One of the most practical ways that a business owner can grow his or her business and make it more attractive to investors is by creating an operations and/or process manual.   This provides a method of creating knowledge transfer between the owner, employees, and anyone else that may be working for you.   It is also a ready source of trade secrets and training materials for new employees.   If you can write down what you know, then you have to spend less time revising it to improve on your processes, training replacement employees, identify potential areas of further research and development to develop additional products or services.

After you have taken the time to create an operations plan you can use it to tweak your business plan and corporate strategy.  For example, are there processes that are prone to increase risk of liability, if so, then you can think about creating a subsidiary or another company to use to shield the less risky aspects of your business.   Maybe, a general commercial liability or products liability insurance policy will effectively help you manage the risk of liability.  The operations manual can be used to train new employees and protect against the risk of losing your employees to your competitors.  Maybe, you are growing at a rate that exposes you to federal and state employment statutes, and it makes sense in investing in a good employment manual and human resource training program.

Moreover, once you have written down your operations manual not only can you identify areas of innovation, but also potential areas for developing your intellectual property portfolio.  The Operations Manual can be the start of an IP development strategy to help create barriers to entry and increase the value of your business.  You can develop not only trade secrets, but patents, trademarks, trade dress, and copyrights.  In addition, you can identify customers that are generating a large portion of your revenues and try to cater to their need for your products or services.  You can identify the traits of these customers that will allow you to find other similar customers to whom you can pitch your product or services.

These customers may also be good sources for strategic alliances and partnerships or some form long term supply or services agreements.   Once, you identify who they are you can also develop product or service bundles and/or add on products or services.  However, if you have not created a method of tracking who your customers are, then you cannot scale your business.   If you have any concerns or questions about your business or corporate planning, then feel free to contact us.

Intentional Interference with Business Relationships or Prospective Economic advantage

The common law tort of interference with contractual relationships claim is often ignored in deciding how to respond to a business partner, employee or a competitors’ actions. However, interference with contractual relationship claims stem from the common law tort claims for intentional interference with business relationships. This is a good tool to use when there are no written agreements with employees, business partners, vendors, or customers,…

Another option is interference with prospective economic advantage, which is a great tool to use when you were expecting a business opportunity or profit that was thwarted by a competitor, business partner, employee, vendor or customer.  Often times, these business or contractual relationships torts can be utilized in place of or to supplement a written agreement.  These business torts are a great way to recover lost profits, sales, or compensatory damages that a business owner or company may have lost due to a dispute with employees, business partners, shareholders, vendors or customers.

In situations, where non-competition agreements are non-existent or found to be unenforceable, business owners may be able to recover the same types of damages by using the: a) interference with contractual relationship; b) intentional interference with business relationship; and c) intentional interference with a prospective economic advantage torts.  If you have any concerns or questions relating to how to handle the disruption of your business or operations, then please feel free to contact us.