What is on the supervision review list? FTC Announces Franchise Rules Workshop

Etymologists – the origin of the word – trace “franchise” to a mashup of French terms meaning “straight expression” and “membership.” Five hundred years later, the two concepts remain intertwined in the Federal Trade Commission’s franchising rules. Please join us virtually on November 10, 2020 as we host an online public event, Review of Franchise Rules: FTC Workshop.

The goal of the franchise rules, which have been in place since 1978, is to provide people considering purchasing a franchise the information they need to weigh the risks and benefits of a potential investment. At the heart of the rule is the franchise disclosure document. The document must contain key information about the franchise and must be presented in a standardized format to make it easier for potential franchisees to compare offers.

Last year, as part of its ongoing review of all of its rules and guidance, the FTC announced that the franchising rule was the next one to receive attention and asked for your feedback. We received 39 public comments reflecting a wide range of views. All commenters agreed that the rule continues to be needed, but some commenters proposed modifications, including changes to the substance and form of required disclosures. Based on your comments, we will convene a review meeting of the Franchising Rules to discuss the future of the Rules.

You’ll need to read the just-released Federal Register notice for the details, but topics in the table include financial performance statements (franchise insiders call them “Item 19 disclosures”), the use of disclaimers, and the format of franchise disclosure documents .

Follow the Business Blog for updates on the agenda. But for now, if you would like to be considered a possible panelist, please email us at Franchiserule@ftc.gov by October 1, 2020. We will also keep public records open until December 17, 2020, so you can answer questions raised at the workshop. (A Federal Register notice explains the process.)

Mark your calendars for Tuesday, November 10th at 1:00 ET (time for review of franchise rules). We will post a link on the event page a few minutes before the start time so you can watch the live stream.