The Franchise Disclosure Document (“FDD”), formerly known as the Uniform Franchise Offering Circular (“UFOC”), is a legal document that franchisors must furnish to franchisees in accordance with the Franchise Rule (16 C.F.R. Part 436 which is regulated by the Federal Trade Commission).  Franchisors must furnish prospective franchisees with a FDD at least 14 calendar days before the prospective franchisee signs a binding agreement with, or makes any payment to, the franchisor or an affiliate in connection with the proposed franchise sale. The FDD contains material information about a franchise operation and is designed to help franchisees analyze the merits of a franchisor.

GENERAL RULE: Carefully review and negotiate the terms contained in the Franchise Disclosure Document prior to making any investment in a franchise.

All FDDs must contain the following categories:  

The Franchisor and Any Predecessors; Litigation History; Bankruptcy (i.e., any franchisees who may have filed); Listing of the Initial Franchise Fee and Other Initial Payments; Other Fees and Expenses; Statement of Franchisee’s Initial Investment; Obligations of Franchisee to Purchase or Lease from Designated Sources; Obligations of Franchisee to Purchase or Lease in Accordance with Specifications or from Authorized Suppliers; Financing Arrangements; Obligations of the Franchisor; Other Supervision, Assistance or Services; Exclusive/Designated Area of Territory; Trademarks, Service Marks, Trade Names, Logo types and Commercial Symbols; Patents and Copyrights; Obligations of the Franchisee to Participate in the Actual Operation of the Franchise Business; Restrictions on Goods and Services Offered by Franchisee; Renewal, Termination, Repurchase, Modification and Assignment of the Franchise Agreement and Related Information; Arrangements with Public Figures; Actual, Average, Projected or Forecasted Franchise Sales, Profits or Earnings; Information Regarding Franchises of the Franchisor; Financial Statements; and Acknowledgment of Receipt by Respective Franchisee.

Please note that I strongly urge you to retain the services of an experienced franchise attorney because although the Franchise Disclosure Document is required by law, no governing body reviews the document for accuracy and/or omissions of fact. 

The ABC Law prohibits from selling, serving, delivering or offering to patrons an unlimited number of drinks during any set period of time for a fixed price. The law also requires that licensees prohibit party organizers, promoters, etc., from engaging in this conduct in the licensees’ establishment. The statute also prohibits licensees from creating drink specials which, in the judgment of the Authority, are attempts to circumvent the law. This includes offerings of free drinks, or multiple drinks for free or for the price of a single drink, or for a low initial price followed by a price increment per hour or other period of time.

GENERAL RULE: Unlimited drinks or “All you can drink” specials are illegal in NY.

The SLA does allow 2 for 1, half price and other such specials where the price of a drink is not lower than one-half of the premise’s normal or regular price for the same drink. Section 117-a does not apply to private functions not opened to the public, such as weddings, banquets, or receptions, or other similar functions or to a package of food and beverages where the service of alcoholic beverages is incidental to the event or function. Most recently, a NY bar that violated this rule received a civil penalty in the amount of $10,000.00 and a 15 day suspension of their liquor license.

The New York City Mayor’s Office published a terrific guide that should be read by all indiviudals that own, or plan to own, a restaurant in NYC.   Its a terrific resource for the basics of NY restaurant ownership.  Here’s the link to the guide:

http://www.nyc.gov/html/records/pdf/govpub/2737nycrestaurantguide-81606.pdf

A New York City landmark restaurant recently settled a suit filed against them for sexual and racial discrimination.  The suit was filed by the EEOC against Tavern on the Green. The Commission claimed that Tavern on the Green took part in sexual and racial harassment against their female, black and Hispanic employees. Leon Drogy, a former manager at the restaurant, was reportedly particularly abusive towards female employees. “Verbally, female employees were subjected to repeated comments related to sexual positions, sexual acts and even asked for sexual favors,” says Kam S. Wong, an attorney for the commission. Drogy also reportedly harassed black and Hispanic employees, calling them “ignorant immigrants” and making fun of their accents.

A $2.2 million settlement was reached in the case, which will reportedly be distributed among more than 50 people who were the victims of the abuse.

This has absolutely nothing to do with law but I had to blog on it. It’s actually a fully submerged underwater restaurant called “Ithaa” in the Maldives and its doing very well.  I’m thinking might work just as well in New York . . .say the Hudson River.  What do you think Hanson? Ripert? Vongerichten? Batali? Any takers?