2025 started out with a bang for the Cheng Cohen crew. We’ve jumped on the bandwagon and put together our list of top Ins and Outs for 2025! We’ll be tracking these issues (the legal ones anyway) and more for you as the year progresses.

In: AI

Artificial Intelligence or AI is expected to continuously grow from now until 2030, ultimately reaching over 700 million users. By this year, 80% of customer service and support organizations will use generative AI (things like chatbots). Franchised businesses naturally want to leverage the opportunities AI presents, particularly in areas like franchise sales. And we often see them run up against laws and regulations that are not written for this new world. This includes the franchise laws, and so we expect to help our clients navigate a murky legal framework as they rapidly advance in the use of AI technologies this year.

Out: The Corporate Transparency Act

For now, reporting entities are not required to file Beneficial Ownership Information reports with the Financial Crimes Enforcement Network. Time (and several pending cases) will tell if this information ultimately must be submitted. See our write up of the CTA here.

In: Weddings

2025 is the year of the weddings for Cheng Cohen with 4 celebrations slated for this year. First up, congratulations to our own Kaitlyn Manley who recently married Drew Lakin in a wonderful celebration in Chicago! Best wishes, Kaitlyn!

Out: Junk Fees

In December of 2024, the Federal Trade Commission issued its final rule targeting “junk fees.” It requires upfront disclosures of pricing information to consumers of live-event tickets and short-term lodging (things like hotels), and it has a broad prohibition on misleading fees. The rule should be published in the Federal Register in March or April of 2025 and would take effect 120 days thereafter. This will be one to watch in 2025, particularly to see if the Trump Administration will enforce the new rule.

In: Cats

We said what we said.

Out: Ankle socks

A hotly debated topic at Cheng Cohen, the team has convinced Amy that ankle socks are OUT.

In: Data Privacy Regulations

Ever since the California Consumer Privacy Act changed the data privacy framework in the United States, this area of law has been developing quickly. Currently twenty states have passed comprehensive data privacy laws, a handful of which will become effective later in 2025. Not only must franchisors and franchisees keep up with these laws, they should also track changes in technology and consumer expectations. Data collection is key. Franchisors should pay particular attention to what customer information is collected at the point of sale, loyalty program data, and methods of online data collection. We anticipate that in 2025, more and more systems will address customer data sharing between the franchisor and franchisees through the franchise agreement, policies and procedures, or specific agreements regarding data processing.

Out: Employee Noncompetes

In 2024, the Federal Trade Commission adopted a comprehensive ban on new noncompetes with workers. A Texas District Court then issued an order stopping the FTC from enforcing the rule, and the FTC appealed. The two circuits considering appeals regarding the ban are seen as likely to uphold the lower courts. It’s also possible that the FTC could abandon these appeals, or the noncompete rule itself, under its new leadership. Regardless, state legislation continues to focus on this area of the law, with more restrictions on the use of employee noncompetes expected in 2025.

In: Bowling

Need we say more? The scores really do speak for themselves.

Out (but also In): Renewal Season

Renewal season is here! While this is a busy time for most franchisors (and we will certainly be spending more time at the office!), it’s also exciting to see how your businesses have grown and developed over the last year. Please turn in your renewal questionnaires!

In: The IFA

The IFA’s Annual Convention is just a few days away, and we are looking forward to seeing our friends and clients! Fifteen members of our team are headed to Las Vegas (don’t worry, we are bringing goodies for the registration bag!). If you would like to meet with a member of our team during the convention, please reach out.