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Log In / Register | Jul 20, 2018

Franchisees to Regulators: Franchisors Must Disclose Franchise-Level Profits

Alexander Hamilton
Where's the money? Alexander Hamilton on $10 bill. (Photo: Sniegowski)

WASHINGTON, D.C.— A franchise buyer's most fundamental question is, "How much can I make with this business?" Obtaining a straight-forward answer to that question has been like finding the proverbial needle in a haystack.

SEIU Petitions FTC to Investigate Franchisors' Predatory Abuse of Franchisees

Man tames commerce, franchisee bridles wild franchisor
Statue in front of Federal Trade Commission of man taming the wild horse of commerce. photo/sniegowski

WASHINGTON, D.C. – The Service Employees International Union yesterday petitioned the Federal Trade Commission, the regulatory body for franchising, to launch an investigation into the $800 billion franchise industry on predatory abuses by franchisors of franchisees.

Franchisee Files SEC Whistleblower Complaint against Domino's Pizza

350px-The_Office_of_the_Whistleblower(SEC)_SymbolANN ARBOR, Michigan – A franchisee, financially devastated through years of disputes and litigation with Domino’s Pizza (NYSE:DPZ), is now taking a new path in fighting against the publicly traded pizza giant. And this time he is doing it without an attorney.

Franchise Rule Specifies Timing for Required Disclosures

The legal protections that apply to sales of franchises cannot be wished away by sellers, merely by calling the sale of an ongoing business relationship by some other name.

How a Prospective Franchisee Can Review Item 20

When reviewing a Franchise Disclosure Document, whether you’re a prospective franchisee or a franchise attorney, no one piece of information can be taken independent of other information.

Ohio Passes Law to Protect Franchisees

COLUMBUS, Ohio — Ohio has passed a law that goes beyond many other states in its attempt to curb abusive franchising practices. The revised Ohio Business Opportunity Law protects the state's franchisees' right to sue a franchisor for false or untimely disclosure, ensures that Ohio law reigns supreme and attempts to safeguard that disputes be resolved in Ohio, not elsewhere.

Real World Roadblocks to Regulation Change

There is no doubt in my mind that if none of the states required close scrutiny of initial registration disclosure documents, and some review of annual filings was not done [It's not.], the quality of disclosure to franchisees would deteriorate from pretty good to very bad.

When Is a License Really a Franchise?

The Federal Trade Commission Franchise Rule, 16 C.F.R. 436.1 et seq., governs, at a federal level, disclosures which a "franchisor" must provide to each prospective franchise. There are also numerous state laws which may apply in any given situation.

Legacy Academy Franchisor Loses Again

The controversial franchisor has found federal court no more hospitable than state court or the AAA.

Super 8 Barred From Imposing New Loyalty Program Fees

Under the FTC Franchise Rule, a franchisor is required to disclose in Item 6 of its Franchise Disclosure Document (FDD) all recurring or occasional fees associated with operating a franchised outlet.