Compliance obligation of franchisors to include, in required disclosures about contractual provisions regarding termination of the franchise, information about actual policies and practices of the franchisor. Discusses obligation to disclose such policies as permitting franchisees to terminate the relationship voluntarily where the contract does not provide that right, and requiring franchisees to execute a release of claims as a precondition for terminating the relationship.
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.
Applicability of the Franchise Rule to a hotel management arrangement. Discusses the "significant assistance" coverage element.
Compliance obligation of franchisor and area sub-franchisor to prepare annual update of joint disclosure statement within 90 days of the close of different fiscal years.
Applicability of the Franchise Rule to a sub-agency licensing arrangement for cellular phone services. Discusses the "required payment" coverage element and the "minimum investment" exclusion from the Rule's disclosure obligation.
Applicability of the Franchise Rule to a not-for-profit education program. Discusses the lack of a "continuing commercial relationship."
Adequacy of predecessor company's unaudited financial statements to comply with required disclosure of the financial statements of a newly formed franchisor, and to provide substantiation for earnings claims by the new franchisor.
Applicability of the Franchise Rule to a turn-key dry cleaning franchise. Discusses "significant assistance" coverage element.
Applicability of the Franchise Rule to a home-care services sub-contracting arrangement. Discusses "significant control or assistance" and "required payment" coverage elements, and "fractional franchise" exemption.
Applicability of the Franchise Rule to computer software distributorship enabling health care providers to order medical and office supplies. Discusses applicability of the Rule to "distributorships" and the "significant control or assistance" coverage element.