Informal Staff Advisory Opinion 07-1

This staff advisory opinion addresses your client’s proposal to furnish disclosure documents in both English and in a foreign language.

Your client – an unidentified franchise system – periodically deals with prospective franchisees whose primarily language is either Spanish or Portugese. Your client’s current practice is to include in its franchise agreement a paragraph cautioning prospective franchisees that the disclosure document and franchise agreement are in English and urging those with difficulty understanding the documents to seek assistance. This cautionary paragraph is provided in English; Spanish and Portugese translations of the paragraph appear immediately below the English version.

Your client would like to furnish prospective franchisees who speak Spanish or Portugese with a disclosure document in English and, simultaneously, a second version of the document translated into either Spanish or Portugese. You note, correctly, that nothing in the Franchise Rule permits or prohibits this practice.

The only guidance on the issue of language in the original Rule was its admonition that disclosure documents must be “clearly and concisely stated in a legible, written document.” 16 C.F.R. § 436.1(a). The amended Rule, approved by the Commission on January 22, 2007, following the state model set forth in the Uniform Franchise Offering Circular (“UFOC”) Guidelines, that disclosure documents must be in “plain English.”1 This contemplates that franchisors will prepare their disclosure documents in English.

This is not to say, however, that a franchisor may not also provide, in addition to the English language version of the disclosure document, a version in another language, so long as it faithfully, completely, and accurately conveys the same information contained in the English language version. Your letter indicates that this is your client’s proposed course of action. To ensure accuracy of any foreign language version, your client will use a professional and established translation company to prepare the translations. We believe that the mere provision of the same disclosure document simultaneously in English and another language, as described, is not likely to raise compliance issues with respect to the requirements of the Franchise Rule. By furnishing the English language version of the disclosure document, your client clearly will comply with either the original or the amended Franchise Rule.

Please be advised that our opinion is based on the information furnished in your request. Please be advised further that the views expressed in this letter are those of the FTC staff. They have not been reviewed, approved, or adopted by the Commission, and they are not binding upon the Commission. However, they do reflect the opinions of the staff members charged with enforcement of the Franchise Rule.

1 The amended Rule, 72 Fed. Reg. 15,444 (Mar. 30, 2007), will be phased in starting on July 1, 2007, and will be mandatory on July 1, 2008.