No Matter How Good Things Are Going, A Protection Plan is Required | Franchise Law Blog

No Matter How Good Things Are Going, A Protection Plan is Required


When preparing our newsletter articles my preference is to always focus on the positive – business principals‚ success factors and what we learn from the many business successes achieved by our clients. This is the “stuff” that interests me the most (In fact one compelling story that I am extremely interested in is the great brand and innovative business that our client at Bogglo ( has developed and recently launched. For that matter‚ also check out to see another great and innovative company that we are proud to represent. Click here to learn a little more about Bogglo and The Brothers that just do Gutters.

This past month as we settled two very different but equally contentious high-stakes partnership disputes‚ an employee confidentiality dispute and concluded litigation involving the protection of our clients trademarks in a license dispute‚ reality dictates that we remind ourselves that no matter how good things are going‚ a protection plan of action is always required. Obvious stuff…but far too many lawsuits and disputes are preventable or at least manageable if you put the right systems and defensive game plan in place. Here a few items that should be in your “defensive business protection toolkit” and a part of your business and management systems:

Partnership Dispute Repellent

Partnership Dispute RepellentI have seen far too many partnership disputes. So much so‚ that I did write a book about how to deal with them. But rather than having to deal with a partnership dispute‚ my advice is to actively work toward avoiding them. The best repellents for avoiding or mitigating partnership disputes are quite basic and are:

(a)  communication;

(b)  an updated written partnership agreement and;

(c) annual shareholder and partnership meetings conducted by a neutral third party to review corporate minutes‚ corporate actions and to address open issues.

I know this all sounds basic and overly formalistic but I can assure you that this process facilitates communications and creates an internal legal forum that will add certainty to your business and‚ if need be‚ repel overly aggressive lawyers that may eventually encourage unnecessary litigation.

Employee Confidentiality Solvent

Employee ConfidentialityThis is a basic one but overlooked too often. If you have key employees that come into contact with confidential or business sensitive information (i.e.‚ sources of supply‚ pricing information‚ business plans…) then you need a system of requiring these employees to sign a confidentiality agreement. The key here is that the confidentiality agreement must be fairly drafted and match your internal procedures – otherwise it will be enforceable.


Trademark Enhancers

Trademark EnhancerIf you have valuable trademarks‚ I am sure that you are aware that your marks need to be registered with the United States Patent and Trademark Office and chances are that they probably are. However‚ just obtaining an initial trademark registration is not enough. Protection of your marks requires a simple but on-going review process to ensure that:

(a) your trademarks remain current and required supplemental affidavits are filed;

(b) you consider international trademark applications in markets that you may be expanding to (i.e.‚ Canada)  and in countries where your products may be produced (i.e.‚ China);

(c)  you address and not ignore third parties and competitors that may be infringing on your trademarks; and

(d) you consider supplementing and enhancing your trademark protection with the filing of design patents related to the specific design of your product portfolio.

There are other points and while all of these “recommendations” are readily and cost effectively available‚ the problem that we see is that many businesses fail to include these legal protections in their business systems and processes. So just like your marketing‚ customer development and pricing‚ you need a system for protecting your assets and repelling (as best you can) unnecessary litigation and legal threats.

To learn more about how to avoid a partnership or shareholder dispute‚ order a free copy of Charles N. Internicola’s book “The New York and New Jersey Partnership Dispute Guide” or call (718) 979-8688 for more information. 

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Category: Partnership Disputes

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