Recent FTC Franchise Guidance

November 2015

Although Americans have been considering and investing in franchise opportunities for many years, uncertainty remains among some regarding the process for seizing a franchise opportunity and the risks of engaging in business under a franchise relationship. In late September 2015, the Federal Trade Commission published a blog post titled, "Frank talk before buying a franchise." The post advises readers of the FTC's enforcement authority regarding franchises and includes a link to the FTC's franchise rules.

The post also reminds potential franchisees to be careful when considering a franchise opportunity, and it includes a link to the FTC's 2015 publication, "A Consumer's Guide to Buying a Franchise". Among the topics highlighted by the Guide are the costs of pursuing a franchise, the extent of control exercised by a franchisor over a franchisee's business, and the role of franchise brokers. The Guide also provides helpful step-by-step guidance for reviewing the various topics that appear in each Franchise Disclosure Document.