Tag: Franchises, Business Opportunities, and Investments

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It’s not often we can draw a connection between Motown recording artist Freda Payne and an FTC law enforcement action, but here goes:  Ms. Payne topped the charts in the 70s with “Band of Gold” and the FTC recently announced a “Banned of Sterling” — a settlement with business...
According to the ubiquitous infomercials, to rake in the big bucks with Russell Dalbey’s “wealth-building” programs, all you had to do was “Find ‘Em,” “List ‘Em,” and “Make Money" — the “‘Em” being seller-financed promissory notes.  The pitch was convincing to the close to one million...
The Franchise Rule gives prospective purchasers of franchises the material information they need in order to weigh the risks and benefits of such an investment. The Rule requires franchisors to provide all potential franchisees with a disclosure document containing 23 specific items...
The Telemarketing Sales Rule, which requires telemarketers to make specific disclosures of material information; prohibits misrepresentations; sets limits on the times telemarketers may call consumers; prohibits calls to a consumer who has asked not to be called again; and sets...
Applicability of the Franchise Rule to vending machine manufacturers and independent marketing companies. An exhaustive discussion of the coverage issues arising in the sale of business opportunity ventures.
Applicability of the Franchise Rule to a not-for-profit education program. Discusses the lack of a "continuing commercial relationship."
Inapplicability of the Franchise Rule retroactively where the parties anticipated at the time of the purchase that the Rule would not apply because the only required payments were deferred until at least six months after the business opened. Concludes that the result does not change...
Apparent applicability of Franchise Rule to licensing to hospitals of a Travel Health Program, discussing whether the program's assistance is "significant" to the hospital's "entire method of operation."
Applicability of the Franchise Rule to a sub-agency licensing arrangement for cellular phone services. Discusses the "required payment" coverage element and the "minimum investment" exclusion from the Rule's disclosure obligation.
Apparent applicability of the Franchise Rule to a log cabin distributorship. Discusses the criteria for coverage of product franchises, including the required payment element, and the fractional franchise exemption.
Adequacy of predecessor company's unaudited financial statements to comply with required disclosure of the financial statements of a newly formed franchisor, and to provide substantiation for earnings claims by the new franchisor.
Applicability of the Franchise Rule to a home-care services sub-contracting arrangement. Discusses "significant control or assistance" and "required payment" coverage elements, and "fractional franchise" exemption.
Apparent inapplicability of Franchise Rule disclosure requirements to grant of additional franchises to existing franchisee where there are no material charges.
Applicability of the Franchise Rule to a hotel management arrangement. Discusses the "significant assistance" coverage element.
Applicability of the Franchise Rule to a turn-key dry cleaning franchise. Discusses "significant assistance" coverage element.
Apparent applicability of the Franchise Rule to mobile food and soft drink trucks identified by a common name. Discusses significant control and required payment elements.

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