What’s on the regulatory review roll? FTC announces Franchise Rule workshop

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Etymologists – the word origin people – trace “franchise” back to a mash-up of French terms meaning both “forthright expression” and “membership.” Five hundred years later and those two concepts remain intertwined in the FTC’s Franchise Rule. Join us virtually on November 10, 2020, as we host an online public event, Reviewing the Franchise Rule: An FTC Workshop.

In place since 1978, the goal of the Franchise Rule is to provide people thinking about buying a franchise with 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 include key information about the franchise and it must appear in a standardized format to make it easier for prospective franchisees to compare offers.

Last year, as part of the ongoing review of all its rules and guides, the FTC announced that the Franchise Rule was next under the magnifying glass and asked for your feedback. We received 39 public comments reflecting a wide range of viewpoints. All commenters agreed there’s a continuing need for the Rule, but some commenters proposed changes, including to the substance and form of required disclosures. Based on your input, we’re convening Reviewing the Franchise Rule to discuss the future of the Rule.

You’ll want to read the just-released Federal Register Notice for details, but topics on the table include financial performance representations (franchise insiders call them “Item 19 disclosures”), the use of disclaimers, and the format of the Franchise Disclosure Document.

Follow the Business Blog for updates about the agenda. But for now, if you’d like to throw your hat in the ring as a possible panelist, email us at franchiserule@ftc.gov by October 1, 2020. We’ll also keep the public record open until December 17, 2020, so you can respond to issues raised at the workshop. (The Federal Register Notice explains the procedure.)

Mark your calendar for 1:00 ET on Tuesday, November 10th, when Reviewing the Franchise Rule convenes. We’ll post a link on the event page a few minutes before the start time so you can watch the webcast live.

 

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