2009 Top Ten List of Federal (FLSA) Wage and Hour Violations

From time time DDIFO is pleased to present Guest Commentary from valued contributors. The following is an article written and submitted by Attorney Jim Reidy, Sheehan Phinney Bass + Green PA, 1000 Elm Street, Manchester, New Hampshire 03105, 603-627-8217, jreidy@sheehan.com. Each year we review the Top Ten FLSA (federal) wage and hour violations. The stakes for noncompliance with these wage laws are higher than ever before, so with each outline we have provided some guidance on how to avoid being on these DOL “naughty” lists.

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DDIFO Releases AAFD Grading Report to Members and Takes the Clock Down

Over a year ago DDIFO commissioned the American Association of Franchisees and Dealers (AAFD) to review and grade the Dunkin Brands franchise agreement. The AAFD thru a group of executives, entrepreneurs and attorneys have worked for over 15 years to set standards for franchise agreements to make them more fair and equitable. The ultimate goal was to make franchising work better for everyone, believing that a spirit of communication and mediation led to better relations and business results. The AAFD set of standards are referred to as the “Fair Franchising Standards”, In the fall of 2008 DDIFO felt that the existing franchise agreement was causing excess friction and litigation between Dunkin Brands and the franchisees. DDIIFO felt this situation was caused in part by an inequitable franchise agreement, and that the litigation had not been good for the Dunkin’ Donuts franchisee community.

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Judge Declares Mistrial in Suit Against Dunkin’ Donuts

Paul Grimaldi writes in the Providence Journal that a federal judge declared a mistrial Friday in the case of a Vermont businessman suing the Dunkin’ Donuts coffee shop chain after jurors admitted discussing their views of the trial among themselves. “I think this jury is thoroughly infected,” said Senior U.S. District Judge Ronald R. Lagueux. “One juror clearly expressed an opinion about who should win the case.” Lagueux made his decision after lawyers for the businessman, Irwin Barkan, sought to have a mistrial declared after just the first day of a hearing on his lawsuit. The judge said he would reschedule the trial sometime in January.

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Quiznos Could Pay Millions in Settlement

Alan J. Liddle reports at Nation’s Restaurant News that a judge has granted preliminary approval for the settlement of four class-action lawsuits filed by Quiznos Sub franchisees against their franchisor that could significantly alter the relationship of the feuding parties and cost the franchisor up to $100 million. The proposed settlement could impact more than 6,900 individuals now associated with the Denver-based Quiznos system “and several thousand who have closed their franchises,” attorneys for franchisees indicated in court documents.

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Franchisees Exert Pressure on Burger King Board

Elaine Walker reports in the Miami Herald that Burger King’s franchisees say they no longer “trust” or “have confidence” in current management, so they’re going directly to the company’s board of directors with their complaints. That was the message in a letter sent by the National Franchisee Association last week to Burger King’s board of directors. The board needs to take action to repair the relationship with franchisees, which has disintegrated to a level unheard of even for Burger King, the letter said. “Your management team has pushed the franchise community to the brink,” said the letter signed by 27 franchises, including the NFA board and the heads of 21 regional franchisee associations. “We are taking this extraordinary and historic action to communicate our concerns directly to the board.”

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KFC Grilled Chicken Tops List of Memorable New Products, McCafe Second

Stuart Elliot reports in the New York Times that a two-piece Kentucky Grilled Chicken meal at a KFC location in Louisville, Ky. An annual survey of memorable new products gave the top honor for 2009 to the Kentucky Grilled Chicken menu item, which was introduced by the KFC unit of Yum Brands. These are the four other fast-food products that scored the highest in 2009: the McCafe coffees from the McDonald’s Corporation, No. 2; the Torpedo sandwich from Quiznos, No. 6; the Angus Deluxe, also from McDonald’s, No. 7; and Taco Bell Volcano Nachos, from another unit of Yum Brands, No. 8.

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Largest BK Franchisee Staying Loyal to the King

The Buffalo News Business Today reports that the Syracuse-based company that is the largest single owner of Burger King franchises is standing by the chain’s promotion of a cut-rate double cheeseburger, and is not participating in an uprising being mounted by many other franchisees. The National Franchisees Association, on behalf of 850 other Burger King operators around the country, has filed a lawsuit against the Miami-based Burger King Holdings Inc., protesting the corporation’s insistence that its franchisees offer double cheeseburgers for $1.

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Quiznos Settles 4 class-action Suits by Franchisees

The Denver Business Journal reports that four class-action lawsuits brought by Quiznos franchisees against the Denver-based sandwich-shop chain have been settled, the company and the plaintiffs’ law firms said Monday. Chicago-based U.S. District Judge Rebecca Pallmeyer gave preliminary approval to a settlement agreement of the suits, which originally were brought in Colorado, Wisconsin and Illinois and which have been pending for up to three years.

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Ten tips for franchise due diligence

Christa Hoyland writes in QSR.com that Marianne Cintron of Glendora, Calif., thought she had done her homework. When she and her husband looked into buying a Cold Stone Creamery store from a franchisee last year, she started by trying to talk to a number of current franchisees. Of the five who returned her calls, four were selling their stores. Despite the unusually high percentage of sellers, Cintron was reassured by the good things most of them had to say about the concept.

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DDIFO Welcomes New Members!

DDIFO has been invited by a number franchise owners in a number of cities to come and meet franchise owners face to face. I am visiting Dunkin’ Donuts franchise owners around the country in an effort to learn more about your issues and concerns as well as share with you the vision and mission of DDIFO. The meetings have resulted in many franchise owners joining DDIFO. DDIFO welcomes 100’s of new shops as members from the following states: New Jersey, New York, Connecticut, Pennsylvania, Ohio, Illinois, Michigan, Indiana, North Carolina, Maryland, Virginia, Vermont, Massachusetts, Rhode Island, Florida, and Georgia.

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