As if the global pandemic was not enough to cause franchisors and their attorneys heartburn, the North American Securities Administrators Association released a commentary titled “Disclosing Financial Performance Representations in the Time of COVID-19” to add another spice to the stomach turning situation. While it provides franchisors with recommendations on evaluating existing FPRs, it does not exactly provide guidance on what to do after you conduct that evaluation. Should a franchisor leave their FPR as is if there is not a material difference between the 2019 and 2020 results? What constitutes a material difference in results? How do you explain to state examiners that a reasonable basis still exists for your historical FPR presenting 2019 data? If you choose to amend your FPR, what information should you include? How can you explain the circumstances of the situation without using illegal “disclaimers”?
If you have these kinds of questions, we encourage you to attend Megan Center’s presentation at the IFA Virtual Legal Summit being held from August 12-13. This summit covers a whole host of issues plaguing the franchise industry both COVID related and non-COVID related, including this all important FPR consideration. The panel features three experienced private practice franchise practitioners and one in-house practitioner that are dealing with these issues on a day-to-day basis. We will provide practical guidance and options on how best to revise and structure your FPR during this incredibly uncertain and tumultuous time and tactics on how to address state examiner comments. We hope you will take the time to attend and hope you take a few nuggets of advice with you!