It should be obvious that it is never a good idea to lie to a court of law. That’s a pretty basic concept, right? Lying in court documents is called “perjury,” and it’s a crime in every State in the union. So it’s always interesting to hear a story about someone who failed to grasp this fairly simple concept — and how they got caught doing it. This time it was the Husains, longtime McDonald’s franchisees, who lied to a court in Northern California in litigation against their franchisor.
Following on the heels of similar strikes in recent weeks in New York and Chicago, hundreds of St. Louis area fast food restaurant employees walked off the job May 9, which affected more than 30 area businesses including a number of fast food franchise businesses. Franchisors and franchisees should educate themselves and learn how they can and cannot legally respond to a striking workforce.
Under the FTC’s Franchise Rule, a franchisor is permitted, but not required, to answer that all-important question asked by would-be franchise buyers: “how much money can I make?” Sometimes, the franchisor’s answer to that question can generate litigation.
The Senate Judiciary Committee of California approved a franchising bill last month. If passed by California’s legislature (the State Assembly and Senate), SB 610 would amend the California Franchise Relations Act (“CFRA”) by imposing a statutory duty of good faith and fair dealing on franchisees and franchisors.