FRANCHISEES: Federal Trade Commission (FTC) Wants Your Input on Franchise Practices, Need for Regulation
Current & Former Franchise Owners: It’s Time to Speak Up! The FTC is Inviting Comments & Protecting Your Right to Share Them.
(UnhappyFranchisee.Com) Many franchise owners (and former franchise owners) have been hesitant to share their experiences and opinions for fear of bullying or legal repercussions.
To encourage franchisees to provide candid input on their experiences, their franchisor’s business practices, and potential franchise regulatory issues the FTC has issued a policy statement making clear that
…it is unlawful for franchisors to use non-disparagement, goodwill, or confidentiality clauses to directly or indirectly restrict franchisees’ communications with state or federal law enforcement or regulators.
For those still afraid of retaliation, the FTC continues to accept anonymous complaints both on its current Call for Public Comments page and its permanent Complaint portal.
Through 10/10/24, submit your comments here:
Submit consumer or franchise complaints to the FTC here:
Federal Trade Commission (FTC) Report Fraud Portal
It’s time for franchisees, past & present, to break their silence & share what they know.
Franchisees Get Green Light to Share Their Stories
The Federal Trade Commission (FTC) has issued a policy statement that “provisions included in franchise agreements or other contractual documents… may not restrict franchisees’ communications with the Commission or any other state or federal law enforcer or regulator about potential law violations.”
The FTC wants to hear your candid franchise experiences, whether you received accurate information & the promised support, and your suggestions for improving franchising.
They’ve reopened the public comment period until October 10, 2024:
Public Comments on Provisions of Franchise Agreements and Franchisor Business Practices
Franchisors Cannot Restrict Franchisee Communication With FTC, State or Federal Regulators: FTC
On July 12, 2024, the FTC released a new policy statement and guidance warning “that franchisor contract provisions that cut off communications with government and undisclosed junk fees are unlawful.
FTC Takes Action to Ensure Franchisees’ Complaints are Heard and to Protect Against Illegal Fees
The policy statement (link below) states:
The Commission is issuing this Policy Statement to make clear its view that provisions included in franchise agreements or other contractual documents between franchisors and franchisees may not restrict franchisees’ communications with the Commission or any other state or federal
law enforcer or regulator about potential law violations…
Franchisors Cannot Legally Keep Franchisees From Warning of Deceptive Practices
The FTC claims that it and other government agencies rely on franchisee complaints and information to protect current & future franchisees:
By suppressing reports of potential legal violations by franchisors to the government, franchisors impede the flow of franchisee reports and voluntary interviews that are critical to government investigations. Suppressing such information undermines the government’s ability to learn about practices that violate the Franchise Rule, the FTC Act, and other laws.
It also impedes the ability of franchisees to demand lawful conduct from the franchisor by exposing such conduct to the government. These limitations undermine the government’s ability to police the marketplace and the ability of prospective and existing franchisees to protect themselves, and are thus likely to cause substantial harm. For example, prospective franchisees may not learn about deceptive practices before they invest…
FTC: Clauses Prohibiting Franchisee Complaints are “Unfair & Unenforceable.”
The FTC Policy States:
Clauses prohibiting franchisees from reporting potential law violations to the government are considered unfair and unenforceable. Further, the use of implicit or explicit threats to sue or otherwise retaliate against a franchisee who reports potential law violations to the government is also an unfair practice..
READ THE FULL POLICY STATEMENT HERE:
FTC Policy Statement on Franchisee Communication July 12, 2024
Franchise Owners & Former Franchise Owners Are Urged to Submit Comments as Soon as Possible
The FTC comment period is open until October 10, 2024.
It would be advantageous to have the comments available for public discussion and prospective franchisee due diligence as soon as possible.
After the October submission date, franchise complaints can still be submitted to the FTC (won’t be public) or submitted confidentially to Unhappy Franchisee [at] Gmail.com.
UnhappyFranchisee.Com is a privately owned website and not affiliated with the Federal Trade Commission (FTC), other government agency or franchise organization.
SUBMIT COMMENTS TO THE FTC HERE:
Franchise Truth & Franchise Truth for Veterans Initiative
The predatory JDog Junk Hauling franchise – which has resulted in over 300 Veteran franchise terminations – is just the tip of the iceberg.
There is currently no meaningful oversight or enforcement of franchise laws over the claims & representations franchise sellers tell trusting Veterans & other opportunity seekers.
Some of the most predatory franchise sellers are allowed to pass off high-failure rate franchise investments as “Veteran-Friendly” franchises by virtue of their inclusion of deceptive “Best Franchises for Veterans” lists or endorsements by seemingly reputable organizations, like the International Franchise Association’s VetFran program.
Our initial analysis of more than 100 franchises currently promoted to Veterans through the VetFran program revealed that approximately 25% have 3-year franchisee turnover/attrition rates of more than 50%.
That indicates that a high percentage of Veterans being encouraged to invest in these “Veteran-Safe” franchise opportunities will not only lose their investments, savings, credit ratings, & perhaps their homes, some may lose the security clearances that gave them access to the good-paying government and contracting jobs they had prior to their franchise investment.
Contributions to the Franchise Truth & Franchise Truth for Veterans initiatives save countless Veterans from under-informed investment decisions.
Contribute to: Franchise Truth & Franchise Truth for Veterans Initiative
URL: https://www.unhappyfranchisee.com/support-franchise-fairness/
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TAGS: Buying a franchise, Franchise Complaints, franchisee complaints, franchise regulation, franchise oversight, franchise issues, franchisee issues, franchise owner complaints, Federal Trade Commission, FTC, franchise unfairness, responsible franchising