Tension Rules Franchisor-Franchisee Relationships

David Farkas writes in  Chain Leader that attorney J. Michael Dady claims that restaurant chain discounting ruins franchisees’ profits and insists more disclosure would keep franchisors honest.

J. Michael Dady of Dady & Gardner has been arguing case law on behalf of franchisees for more than 30 years. Today, Dady’s list of adversaries includes just about every major restaurant brand including Starbucks, McDonald’s and Burger King. Chain Leader recently asked the Minneapolis-based attorney to bring us up to date on legal issues currently affecting franchisees.

Can you offer a brief overview of restaurant franchisor-franchisee relations?

Across the board today there is an unusually significant emphasis on discounting to get people through the front door or to the drive-thru. There are pluses and minuses to that strategy from a franchisor’s perspective. They make their money based on a percentage of total revenues. But my clients make their money based on bottom-line profitably. You can’t lose a little on every deal and expect to make it up on volume, which is one of my criticisms of Burger King’s $1 double cheeseburger.

What are the legal implications of that situation?

There is attached to the franchisor-franchisee relationship a two-way street called the covenant of good faith and fair dealing. This means franchisees in their relationship with franchisors, and vice versa, have to act in a way that is fair and reasonable and is not discriminatory and in a way that does not deprive the other party of the fruits of the relationship. [Franchisees] buy into a franchise opportunity because they expect a franchisor will help them on the road to profitability. To the extent franchisors are imposing obligations on [franchisees] to sell goods below their actual costs, it violates that contract.

Has there been good news from a legal standpoint for franchisees lately?

We like the Randall, et al. vs. Lady of America case that came out recently in federal court in Minnesota. It says a franchisor may not disclaim the protections afforded to a prospective franchisee by applicable federal or state laws–be they statutory or common law principles–by a [written] disclaimer.

Can you elaborate?

I’ve said often that despite doing this for 30-plus years, I’ll still bet one of these super salesmen could probably talk me into signing just about anything. What the law says, and it varies some from state to state, but in general it says that when you are selling someone a franchise, you’ve got to do it like they did after the ‘33 and ‘34 [Securities Exchange] Acts were passed for selling stocks or bonds. You have to do it with full and fair disclosure so buyers can make informed decisions based on good information.

And the fact that you might oversell somebody, and the in process get them to sign some kind of disclaimer that says we didn’t say or do anything unlawful, that doesn’t work. If you indeed do or say something unlawful, you can’t avoid liability because as a great salesman you got them to sign the disclaimer. That’s a very important point. Before that case, which incidentally is mine, there were cases that suggested the contrary.

Has there been good news from a legal standpoint for franchisors?

I like to talk about my wins. Let someone else talk about my losses.

Let me put it this way, then. In your article “Calling a Penalty on Your Partner,”  you mention that some franchisees forced to close early are still responsible for future royalties. Do franchisors easily get away with that?

It’s the number one point I raise with potential clients. People think intuitively, “If I enter into this franchise opportunity, I’m optimistic things will work out with my good effort and my franchisor’s partnership. But if after three or four years, I have lost lots of money, I will be able to shut my business down and go to law school without further liabilities to the franchisor.”

Lo and behold, if they have assets apart from what they poured into the business, franchisors will say, “You signed up for a 20-year franchise. You closed after five years. I have 15 more years of royalties coming. You’re obligated to keep your doors open and fund your operating losses so I can get my royalty check. Send me a check for 15 years worth of royalties. You owe me hundreds of thousands of dollars.”

And there are cases out there that say that’s right. I say to prospective franchisees that you want to have the express right to get out early if you can’t make it despite your best efforts.

How likely is it that a national franchise brand would require those royalties?

It varies dramatically, much more than you’d think. Let me ask this: How would you like to be a CEO of a company that says to prospects, “Whether you make money or not, you’ll be on the hook for royalties for 20 years”?

Read more at: Chain Leader

Federal Court Rules Oregon Restaurant Tipping Pools OK

The Oregonian report that a federal appeals court has ruled that restaurants can create a “tip pool” that requires servers to share a percentage of tips with kitchen staff so long as the restaurant pays more than the minimum wage.

The 9th U.S. Court of Appeals this week rejected arguments by a waitress at a Portland restaurant who claimed the pooling arrangement violated the Fair Labor Standards Act.

Misty Cumbie argued that because the tip pool at the Vita Cafe included employees who are not “customarily and regularly tipped employees,” it was invalid under the labor act.

The cafe requires its servers to contribute their tips to a pool shared by kitchen staff such as cooks and dishwashers, who got more than half the pool. The remainder was returned to servers in proportion to their hours worked.

But the owners of the cafe, Woody and Aaron Woo, argued the tip pool that included kitchen staff was allowed because the labor act applied only to employers who take a “tip credit” toward meeting the minimum wage by counting a portion of tips as wages.

The appeals court, in an opinion by Judge Diarmuid O’Scannlain, noted the restaurant did not take a tip credit and paid servers wages before tips that met or exceeded the Oregon minimum wage, which was $2.10 above the federal minimum wage at the time.

“Therefore, only the tips redistributed to Cumbie from the pool ever belonged to her, and her contributions to the pool did not, and could not, reduce her wages below the statutory minimum,” O’Scannlain wrote.

As a result, the opinion said, “Cumbie received a wage that was far greater than the federally prescribed minimum, plus a substantial portion of her tips.”

O’Scannlain added that “naturally, she would prefer to receive all of her tips,” but the court ruled the labor act does not restrict tip pooling when no tip credit is taken.

Although the appeals court noted it was the first time it had dealt with the issue of tip pools, Bill Perry, spokesman for the Oregon Restaurant Association, said he doubted the ruling would have much impact on Oregon restaurants.

“This will supplement the back of the house for some restaurants,” Perry said, “but you still want to reward your sales people.”

Judges: Massachusetts’ ‘Tip Law’ not Retroactive: Defense bar hail

David E. Frank writes at Massachusetts Lawyers Weekly via Dolan Media Newswire rulings by two influential trial judges have found that the treble damages provision of the tip statute does not apply retroactively, an issue that courts in Massachusetts have been split on for nearly two years.

On Feb. 8, Superior Court Judge Margaret R. Hinkle, who heads the Business Litigation Session, determined in Hernandez, et al. v. Hyatt Corp. that a 2008 amendment to the state’s controversial tip law – G.L.c.149, §150 – was intended to be applied prospectively only.

Two months earlier, U.S. District Court Judge William G. Young, who served as chief of the court from 1997 to 2005, came to the same conclusion in DiFiore, et al. v. American Airlines, Inc.

“There was a point in time [when] the plaintiffs’ bar had some authority on their side that made them feel they had leverage over us during settlement discussions,” said Brigitte M. Duffy, the Boston lawyer who represented the defendants in Hernandez. “There’s no question that now having the chief of the [BLS] and a former presiding judge of the federal court saying what they’ve said here carries some extra weight.”

Duffy, who practices at Seyfarth Shaw, added that DiFiore and Hernandez are “evidence of a definite trend which swings the pendulum back in our direction. It’s been a good couple of months for defense attorneys in Massachusetts – and we don’t always get good months in wage and hour litigation.”

‘Confused’ judges

Scott E. Adams of Groveland, who represented the plaintiffs in Hernandez, said the uncertainty on retroactivity started in 2005 when the Supreme Judicial Court held in Weidmann v. The Bradford Group that treble damages could be awarded only on a finding that an employer had willfully committed an infraction.

That test was struck down by Chapter 80 of the Acts of 2008, which made Massachusetts the first state in the country to impose automatic treble damages for wage and hour law violations. What remained unclear was whether the Legislature intended for damages to apply to cases that pre-dated the passage of the bill.

Adams said judges across the state have been split on the question ever since. For example, he said, Superior Court Judges Raymond J. Brassard and Leila R. Kern have ruled opposite of Hinkle and Young.

“These are significant matters of law that have some important philosophical questions underlying them, and there is clearly a problem with the implementation and enforcement of them,” Adams said. “There are a number of judges in Massachusetts who seem to be very confused about why these laws were developed in the first place and what they were intended to do.”

Adams also criticized the Hernandez ruling for dismissing his clients’ breach of contract claims on grounds that the statute, which has a three-year statute of limitations, preempts any common law remedies. The common law claims, which were based on the premise that the tip statute creates an implied contract between employers and employees, carry a six-year statute of limitations, he said.   

Read more at: Dolan Media Newswire

Starbucks Customer Sues, Claiming Cursing Outburst a Disability

Sarah Gilbert at WallePop.com that in the second legal challenge to a Starbucks store’s fair treatment last week, a Florida man is suing the Starbucks on Powerline Road west of Boca Raton. Robert Friedman suffers from Tourette’s syndrome, a genetic disorder which is characterized by uncontrollable outbursts, often laced with obscenities. Last year, he was visiting the Starbucks and suffered from such a flare-up; customers said he banged on the wall and shouted curse words.

Although Friedman says he later apologized for the eruption, the employees called the local sheriff’s office, asking deputies to remove him from the premises and give him a “no trespass” warning.

Tourette’s syndrome is far more common than most people realize; between 0.1% and 1% of children have Tourette’s, although most suffer from chiefly the physical and less socially unacceptable verbal tics (which can include coughing, throat clearing and eye blinking) and not the more shocking or noticeably odd tics such as coprolalia (the spontaneous utterance of socially objectionable or taboo words or phrases), echolalia (repeating the words of others) and palilalia (repeating one’s own words). In most people, however, symptoms decrease and eventually disappear by adolescence. But for those who suffer from severe symptoms through adulthood, there is no cure and no medication that works universally well for all sufferers.

While the severe form of Tourette’s syndrome can be a challenge, it is a protected disability under the Americans with Disabilities Act and the Florida Commission on Human Relations “found that there was evidence that the coffee shop didn’t take steps to make accommodations for Friedman’s disability.” Lawsuits brought by individuals with Tourette’s have had mixed success; cases that have achieved success include one against Wal-Mart and another against a hair salon. However, in most cases, the defendant has not paid damages to the disabled person, instead agreeing to provide training to its employees and accommodation to disabled customers. In a few instances, a company has paid damages into a Tourette’s syndrome foundation.

Given the support of the Florida Commission on Human Relations, Friedman will likely have a case here, just as the barista who says he was fired for his tattoos (while female employees with tattoos were not) likely has a case as well. Starbucks, unsurprisingly, isn’t commenting on either legal matter; I’d be willing to bet, though, that someone in the corporate human resources department is seriously evaluating the company’s training manuals and preparing for an uncomfortable year.

Update: Reading the filings for the case reveals that all the baristas at this coffee shop knew Friedman, and knew of his condition; he was a regular customer and generally welcomed. The case hinges on the extreme action of asking the sheriff’s deputies to bar him using a “no trespass” warning. He apologized after the outburst, he says, and the baristas went forward with the removal anyway.

McDonald’s, Franchisees In Germany Wage Dispute

David Crawford and Julie Jargon at the Wall Street Journal write that McDonald’s Corp.’s German unit is engaged in a dispute with several franchise holders who accuse the world’s largest hamburger chain of using aggressive tactics to try to force them out of their contracts.

Court records show McDonald’s hired a team of private detectives to dig up evidence of conflicts of interest against one of the franchisees.

In other instances, at least five franchisees say, McDonald’s offered corporate jobs to franchise employees in exchange for information needed to terminate franchise holders’ contracts or ordered its personnel auditors to collect evidence against them.

The restaurant operators say these methods are part of a broad campaign by McDonald’s in Germany, one of the company’s biggest markets, to reclaim stores held by franchisees and to slow unit growth in a country saturated with fast-food outlets, an allegation McDonald’s denies.

Ulrich Bissinger, senior director of McDonald’s German legal department, confirmed that the company hired detectives to monitor one franchisee.

On Wednesday, that franchisee said he would forfeit his four restaurants to McDonald’s Germany because he couldn’t afford to post a security bond of about €4 million ($5.6 million) required to continue litigation against the company.

Mr. Bissinger denied that McDonald’s was terminating franchise contracts as part of a new business strategy. Its motive, he said, was “to protect its franchise system” from partners it believes violated its contracts.

Heidi Barker, a spokeswoman at McDonald’s corporate headquarters in Oak Brook, Ill., said the use of detectives was “an extremely uncommon occurrence that does not reflect the broader practices of McDonald’s Germany nor those of McDonald’s.”

None of the things McDonald’s Germany is alleged to have done are illegal. But while German privacy officials found it had a legitimate purpose in conducting personnel audits, they asked for changes in its approach, which violated privacy regulations. Those changes have been made, the company and privacy officials say.

While it isn’t common in the restaurant industry, hiring private investigators to gather information on franchisees “is one way to confirm whether a franchisee is within the boundaries of what’s been outlined in their agreement,” said Darren Tristano, executive vice president of restaurant consulting firm Technomic Inc. More typical of the industry is the use of company auditors and secret shoppers to monitor the service, cleanliness and quality of food at fast-food restaurants, he and other industry experts say.

Investigators are “one of many tools that franchisors use to protect their brand, but my sense is [they are] used on a case-by-case basis,” says Alisa Harrison, spokeswoman for the International Franchise Association, a trade group representing both franchisees and franchisors across a range of industries, including restaurants, retailers and cleaning services.

Frankfurt franchisee Enrico Sodano said McDonald’s began trying to force him out of his four restaurants in summer 2008, by alleging breach of contract in a lawsuit.

McDonald’s initially accused Mr. Sodano of paying his employees late on at least one occasion. McDonald’s then dispatched a team of detectives to shadow him in Switzerland last year, court records show, in an attempt to prove that Mr. Sodano was a silent partner in a Zurich pizzeria.

Such an investment could constitute a violation of company rules that prohibit franchise holders from managing or putting money into competing restaurants. Mr. Sodano, a McDonald’s franchisee since 1997, denied he was a partner in the venture, and said he was sharing ideas with a friend, not discussing a new restaurant.

Mr. Bissinger, McDonald’s German legal executive, said he ordered the detectives to collect evidence on Mr. Sodano’s alleged conflict in Zurich after the franchisee postponed a court hearing to travel there.

Weeks earlier, a German court had rejected McDonald’s original bid to force him out of his restaurants, a ruling the company had appealed.

McDonald’s presented the information collected by the Zurich detectives as evidence in a lawsuit to cancel Mr. Sodano’s franchise contract, according to court records. It won a key court decision in November based in part on that evidence. Mr. Sodano appealed the ruling.

On Tuesday, Germany’s highest civilian court said Mr. Sodano would have to relinquish his restaurants to McDonald’s or put up a bond to continue with his appeal.

Mr. Sodano said Wednesday, that he plans to return his restaurants to the company by Feb. 1, and to consider legal options for obtaining compensation from the company.

Read More at the Wall Street Journal

Trouble Brewing at Starbucks

Vic Walter, Angela Hill and Brian Ross report at ABC News that an ”alarmingly high” number of high school students are reporting sexual advances from their adult bosses and other supervisors at some of the country’s best known fast food operations, according to an official of the Equal Employment Opportunity Commission.

“It’s an incredibly serious problem,” said Bill Cash of the EEOC in an interview to be broadcast tonight on the ABC News program “20/20.”

“Employers that choose to use high school kids to work have a responsibility to protect these young people,” Cash said. “We don’t want them to be fondled, we don’t want them to be raped.”

The issue is being raised in a number of lawsuits, including cases now pending in California against Starbucks and a McDonald’s franchise owner.

Watch the video at:  Trouble Brewing at Starbucks.

Top Franchise Legal Decisions to Watch

Ron  Ruggless of Nation’s Restaurant News writes that decisions in franchise-related law in 2009 produced new frameworks under which franchisors and franchisees will be doing business in the year ahead, and beyond.

Citing four restaurant-industry cases, litigators in the Atlanta-based DLA Piper LLP international law firm this week offered the “Top Nine for ‘09” legal decisions that they think will be affecting franchisor-franchisee agreements.

“The 2009 cases reinforce the importance of franchisors keeping up with the latest developments in franchise cases because legal rulings often provide guidance to changes that franchisors should consider making to their operations, their decisions and their legal documents,” said Barry Heller, the franchise litigation partner in DLA Piper’s Virginia office.

Heller said “the most troubling” case from 2009 was one involving an Atlanta Bread Co. franchisee who created his own concept, P.J.’s Coffee & Lounge. Atlanta Bread terminated his five franchise agreements, claiming the franchisee created a competing business that violated terms of the franchise agreements. The Georgia Supreme Court ruled last year in favor of the former franchisee.

Heller compared the case, Atlanta Bread Co. International Inc. v. Lupton-Smith, to the plot of “Les Miserables” by Victor Hugo.

“In that story, a man steals a single loaf of bread and ends up being imprisoned for 19 years,” Heller said. “In the Atlanta Bread case, the franchisee allegedly steals bread-making methods and manages to get away with it.

“By striking the in-term covenant involved in that case (which contained fairly typical in-term covenant language),” Heller said, “it theoretically would allow Georgia franchisees of restaurant franchisors with similar in-term covenants to operate a competitive business while remaining a franchisee of that franchisor.”

Georgia voters will consider a constitutional amendment in November that would allow the state’s jurists to consider parts – or to “blue-pencil” – franchise agreements without ruling against the whole contract.

Among the other cases featured in DLA Piper’s Top 9 case list were rulings on supplier mandates and corporate disclosures. “How significant certain cases may be often depends upon your particular franchise system,” Heller noted.

Restaurant cases in DLA Piper’s “Top Nine Cases of ‘09” included:

Supplier issues. In Burda v. Wendy’s International, an Ohio case in which a franchisee sued against the franchisor’s mandate for use of one supplier as a source of hamburger buns, courts found in favor of the franchisee, who had previously been allowed to select from several suppliers.

Scott McIntosh of DLA Piper’s Washington, D.C., office said franchisors need to write broad rights into franchise agreements when it comes to designating suppliers and rights on earning fees and imposing surcharges on purchases from approved suppliers. McIntosh said this allows “for maximum flexibility in structuring supply issues within the franchise system.”

Read more: Nation’s Restaurant News

Restaurants at the Crossroads: A State-by-State Summary of Key Wage-and-Hour Provisions

A new Roundtable Retrospective from Cornell’s Center for Hospitality Research (CHR) seeks to unravel the remarkable tangle of wage-and-hour regulations throughout the United States. Based on an investigation that began with the center’s Labor and Employment Law Roundtables, authors Carolyn Richmond, Martha Lomanno, and David Sherwyn developed this guide to wage-and-hour regulations in all fifty U.S. states, as well as other jurisdictions, such as the Commonwealth of Puerto Rico and the District of Columbia. They were assisted in this research by Darren Rumack and Jason Shapiro.

The Roundtable Retrospective,”Restaurants at the Crossroads: A State-by-State Summary of Key Wage-and-Hour Provisions,” is available via a PDF Document here at DDIFO.org view the full report here.

“Federal regulations control in all jurisdictions, unless the state has enacted more stringent rules,” explained Sherwyn, an associate professor at the Cornell School of Hotel Administration. “The problem for restaurant operators—and other employers—is that operators can be tripped up by this tangle of state wage-and-hour regulations. It is important to know what your state requires and when federal regulations are in effect. Carolyn Richmond, Martha Lomanno, and the research team have done a great service to the restaurant industry by compiling these regulations.” Richmond is a partner and co-chair of the Hospitality Practice Group of Fox Rothschild LLP, a partner of the CHR.

In addition to the breakdown of specific wage-and-hour regulations, the document outlines recent case law where restaurateurs have been found in violation of wage-and-hour regulations, to their detriment. Awards to the plaintiff employees in some cases amounted to several million dollars. The wage-and-hour regulations specify such matters as how often employees must be paid, minimum wages, premium pay rates, employees’ break and lunch patterns, and how to handle service charges and tip pools.

About The Center for Hospitality Research:

A unit of the Cornell School of Hotel Administration, The Center for Hospitality Research (CHR) sponsors research designed to improve practices in the hospitality industry. Under the lead of the center’s 76 corporate affiliates, experienced scholars work closely with business executives to discover new insights into strategic, managerial and operating practices. The center also publishes the award-winning hospitality journal, the Cornell Hospitality Quarterly. To learn more about the center and its projects, visit www.chr.cornell.edu.
 
Center Senior Partners: American Airlines Admirals Club, job.travel, McDonald’s USA, Philips Hospitality, Southern Wine and Spirits of America, Inc., Taj Hotels Resorts and Palaces, and TIG Global

Center Partners: AIG Global Real Estate Investment, Davis & Gilbert LLP, Deloitte & Touche USA LLP, Denihan Hospitality Group, eCornell & Executive Education, Expedia, Inc., Four Seasons Hotels and Resorts, Fox Rothschild LLP, French Quarter Holdings, Inc., FX Real Estate and Entertainment, Inc., HVS, InterContinental Hotels Group, Jumeirah Group, LRP Publications, Marriott International, Inc., Marsh’s Hospitality Practice, Mobil Travel Guide, Inc., PricewaterhouseCoopers, Proskauer Rose LLP, SAS, Smith Travel Research, SynXis (a Sabre Holdings Corporation), Thayer Lodging Group, Thompson Hotels, Travelport, WATG, and WhiteSand Consulting

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.

The case stems from 2005, three years after Barkan bought the rights to run Dunkin’ Donut’s coffee shops in downtown Providence.

The two sides had been arguing for months over franchise fees, loan payments and rent bills. The chain wanted nearly $2 million from him and tried to revoke his operating permits.

The case landed in U.S. District Court for a time before making a stop in U.S. Bankruptcy Court, where three Rhode Islanders ended up with Barkan’s stores after a contentious process that saw one sale nullified by a judge amid allegations of bid rigging.

Eventually, Barkan’s shops were auctioned off for $4.5 million.

The businessman has been trying to recoup money from Dunkin’ Donuts ever since.

The two sides never reached a settlement and the fight landed back in U.S. District Court this year.

Weeks before the trial started, Barkan, of Waitsfield, Vt., said he was looking forward to going to court.

“I’m a firm believer in the jury system,” Barkan said. “I am anxious to tell the jury my story.”

He got started Thursday and was about 20 minutes into his testimony on the first day of the trial when Lagueux ended the hearing for the day.

Sometime between then and the time the trial was to resume Friday afternoon, Barkan’s lawyers got wind that the jurors had talked about the case and that at least one had read a newspaper article about the first day’s proceedings.

They asked for a mistrial.

Lagueux and lawyers for both sides interviewed three jurors in the judge’s chambers before he ruled on the motion.

Later in court, one of Barkan’s lawyers, Elizabeth Noonan, said: “It became apparent that one juror had already made up his mind.”

Lagueux granted the motion despite the objections of Dunkin’ Donuts lawyer, Arthur L. Pressman.

“This jury panel is not tainted, but is in need of clarifying instruction,” Pressman said.

Lagueux replied: “This is a good time for a mistrial because it’s early and we haven’t wasted a lot of time.”

Lagueux laid part of the blame on himself, he said, for failing to clearly instruct jurors not to read or listen to news reports about the case.

“I am also troubled by the newspaper report,” he said. “That’s ground for a mistrial itself … I forgot to tell the jurors not to read newspaper articles.”

Providence Journal

Restaurant Chains in California Can Go Lean on Menu Labeling

California laws give them flexibility on how much information to share with diners and where to post it. But starting in 2011, chains will have to include calorie counts on their menus.

Jerry Hirsch reports in the Los Angeles Times that diners at California Pizza Kitchen last week found some enticing new offerings such as white chocolate strawberry cheesecake, Baja-style tacos with sautéed mahi-mahi, and a Moroccan-spiced chicken breast salad.

But gone from the menu are those often-revealing calorie counts that the restaurant has listed for each item since July 1.

The Los Angeles-based pizza and pasta chain dropped that data when it printed new menus last week, in part because customers just didn’t like it much.

“You have to look at the restaurant business as entertainment. Why make the customer feel guilty?” said Larry Flax, co-chief executive at CPK. “People kept getting mad” because they didn’t understand that a state law mandates that chain restaurants provide this type of information to customers, he said.

The restaurant chain also wanted to gather up all the nutritional facts — carbs, fat, etc. — and put it in one place for patrons who ask for the information.

The change highlights the different ways California’s chain restaurants are dealing with new and still-evolving rules that dictate how they provide patrons with nutritional information about the food they serve.

Chains such as IHOP and Applebee’s Neighborhood Grill & Bar are posting calorie information on their menus. Some Jack in the Box restaurants have the information framed on a wall near the counter. Others are offering the data in brochures kept in a holder on the wall.

Non-chain restaurants — including the local pizza joint and expensive, white-tablecloth eateries — are exempt from the rules but may provide the information voluntarily.

When people sit down at a California Pizza Kitchen, they are handed the data-free menu and a menu-like folder that contains detailed nutritional information about the food served by the chain. The chain posts the same nutrition facts online so that patrons in states that don’t have menu-labeling laws can still access the information.

Not listing calories on menus is legal, at least for now.

California menu-labeling laws were enacted last year but are being phased in. For now, restaurant chains with 20 or more units can choose between printing calorie counts next to items on their printed menus or menu boards and providing more detailed nutritional information — such as calories, saturated fat, carbohydrates and sodium — on brochures either on the table or near the cash register.

Starting in 2011, chain restaurants will have to print calorie information on their menus. So eventually, California Pizza Kitchen will go back to the menu style it just dropped.

“This legislation will help Californians make more informed, healthier choices by making calorie information easily accessible at thousands of restaurants throughout our state,” Gov. Arnold Schwarzenegger said when he signed the law last year.

It’s no surprise that some restaurants in California are opting to provide nutritional information in a separate brochure instead of on menus, said Cathy Nonas, director of the New York City Health Department’s physical activity and nutrition program.

When New York’s law went into effect last year, some chains quickly put calorie information on their menus while others didn’t. “They had a difficult time,” and some of the early adopters went back to their older menus that lacked the information, she said.

Read more at: Los Angeles Times

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