Advisory Opinions

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.

Opinion 02-3

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.

Opinion 00-2

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.

Opinion 99-5

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.

Opinion 98-8

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.

Opinion 98-7

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.

Opinion 98-6

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.

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