Formu-3 International, Inc.

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The Federal Trade Commission has given final approval to a consent agreement with Formu-3 International, Inc., the franchisor of "Form-You-3" or "Formu-3" weight-loss centers, and two related companies, settling charges that they engaged in deceptive advertising by making unsubstantiated weight-loss and weight-loss maintenance claims. FTC allegations also addressed deceptive pricing, rate of weight-loss, safety-related and other claims. The Commission's action makes the consent order pro- visions binding on the respondents.

Formu-3 International, Inc., Formu-3 of Northern Ohio, Inc., and Formu-3 of Southern Ohio, Inc., are all based in Canton, Ohio.

The final order prohibits the respondents from misrepre- senting the performance, efficacy or safety of any weight-loss program they offer, or the competence or training of their personnel, in the future. The order requires them to have scientific data to back up future claims they make about weight loss success, rates, time frames, and weight maintenance. More- over, the order articulates the type of evidence that would be required to support various maintenance claims. For instance, claims that weight loss is maintained long term will have to be supported by evidence based on the experience of participants who were followed for at least two years from the completion of the active maintenance phase of respondents' program.

In addition, maintenance success claims in most ads will have to be accompanied by various clear and prominent dis- closures, including the statement, "For many dieters, weight loss is temporary," as well as disclosures about the average weight- loss maintenance for consumers on the relevant program.

The order requires any testimonial the respondents use to represent the results consumers generally achieve, unless the respondents also clearly disclose either the generally expected results or a statement such as, "This result is not typical. You may be less successful.

The order further prohibits the respondents from misre- presenting the existence or amount of calories, fat or any other nutrient or ingredient in any food product, and from misrepre senting the efficacy, performance or safety of any food or drug they sell. The order permits the respondents to make representa- tions that are specifically permitted in labeling for any product or drug by regulations promulgated by the Food and Drug Adminstration or nutrition labeling regulations promulgated by the Department of Agriculture.

In addition, the order prohibits the respondents from misre- presenting the price of the program in any way. The order pro- hibits Formu-3 from advertising a daily, weekly or monthly price for its program unless it also discloses the number of days, weeks or months consumers will be required to pay the advertised price or the total cost of the weight-loss program.

To address the safety-related allegations, the FTC order requires the respondents to warn certain customers about health risks associated with not following the diet program protocol.

Finally, the order requires the respondents to provide their franchisees with a copy of the order, contractually bind their franchisees to abide by the requirements in the order, and to monitor their compliance.

The consent agreement was announced for a 60-day public- comment period on Jan. 12, 1995. The Commission vote to issue it in final form occurred on April 11, and was 4-0.

NOTE: A consent agreement is for settlement purposes only and does not constitute admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions by the respon- dents. Each violation of such an order may result in a civil penalty of up to $10,000.

A news release summarizing the complaint and consent agree- ment was issued at the time the Commission accepted the consent agreement for public comment. Copies of that release and of the complaint and final order are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580.

(FTC File No. 922 3212)

(FTC Docket No. C-3568)

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