Addresses whether a franchisor must furnish disclosures to an existing franchisee when the franchisee initiates a modification of the franchise agreement’s protected territory provision.
Our staff issue advisory opinions to help clarify FTC rules and decisions regarding either competition or consumer protection issues, often in response to requests from businesses and industry groups. To find a specific opinion, use the filters on this page. Parties may request advice from our staff concerning proposed conduct.
Franchise & Business Opportunities
The following staff opinions interpreting the original Franchise Rule remain useful as a source of interpretation for the amended Franchise Rule and the Business Opportunity Rule, except where the Statement of Basis and Purpose for the amended Franchise Rule or Business Opportunity Rule contradict a staff opinion.
Discusses whether a not-for profit 501(c)(3) organization satisfies the definition of a franchise under the Franchise Rule.
Discusses whether the grant of multiple licenses to the same licensee qualifies for the Franchise Rule's single license exclusion.
Provides guidance on how a franchisor may comply with the Franchise Rule via the Internet.
Discusses whether the franchisor's or franchisee's degree of controlling interest in an outlet affects the application of the Franchise Rule.
Discusses the application of the Franchise Rule to a business arrangment involving multiple limited liability "strategic partners."
Discusses whether a non-profit, tax exempt corporation qualifies as a "franchisor" under the Franchise Rule.
Discusses the application of the single trademark license exemption.
Discusses whether the required payment element is satisfied if the franchisee pays no initial up-front franchise fee, but leases the premises and equipment from the restaurant-franchisor, pays a "working capital" deposit, and must permit the withdrawal of funds from a shared franchisor-franchisee "subaccount" to pay for operating expenses.
Discusses the application of the Franchise Rule to a program offering advertising opportunities involving Internet Web sites.
Responds to requests for clarification of Advisory 99-6 addressing business consultants' disclosure obigations.
Discusses the fractional franchise exemption, in particular: (1) whether the location of the fractional franchise may be disqualifying; (2) whether the exemption is available to a partnership; and (3) whether the exemption is available where the fractional franchisee operates the new line of business as a newly formed corporate subsidiary.
Discusses business consultants' obligation to furnish disclosure documents.
Discusses the meaning of "commercial relationship
Discusses the application of the Franchise Rule to free-standing sandwhich shops.
Discusses whether the sale of a pay telephone business opportunity meets the Rule's "continuing commercial relationship" requirement
Clarifies a previous opinion addressing when a future payment may satisfy the Rule's minimum payment requirement.
Determines that the Rule does not prevent a franchisor from amending its disclosure document and franchise agreement after the tender of a signed contract and payment from a prospective franchisee, and that the question of whether a contract was formed by the tender is a matter of state law.
Apparent applicability of Rule to a sale of assets by owners of a laundry and dry cleaning plant and 13 satellite facilities, where purchasers would acquire three or more locations, have the option to use the seller's trademark and be required to comply with the seller's pricing restrictions.
Possible availability of the "fractional franchise" exemption to a franchisor of an "affiliation" franchise covered by the Rule and otherwise subject to its disclosure requirements.