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CNBC for Upcoming Franchising Industry Documentary - GeoClickz



CNBC for Upcoming Franchising Industry Documentary


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  The survey also showed that 82 percent of franchisees described their business relationship
with their franchisor as somewhat or very favorable with 50 percent reporting that the view was
very favorable. Some 12 percent of the respondents had a very or somewhat negative view
with only 3 percent being very negative.


The Franchise Industry Discloses More Information than Any other Business
In both scope and quality, the nature of the disclosure required under the Federal Trade
Commissionís (FTC) Franchise Rule far exceeds the information available in any other
comparable business transaction. The IFA strongly supports the pre-sale disclosure approach.
The franchise business model has been regulated by a specific rule at the FTC since the
1970s. During the most recent revision of this rule in 2007, FTC staff spent thousands of hours
considering every facet of the issue. Stakeholders from all segments of the franchise business
community testified and submitted written comments, and the FTC reviewed the accumulated
commentary thoroughly. In crafting the new rule, the FTC wisely resisted the temptation to
increase regulation on the franchise business model based on a few isolated cases. Instead,
the agency directed its efforts toward improving the quality of pre-sale disclosure so that
potential franchise investors would be well informed. The agency concluded that the franchise
marketplace was sufficiently diverse in terms of contract terms and offerings that any individual
seeking a franchise purchase could reasonably protect themselves from harm by reading the
disclosure document and comparison shopping.

I should also note that the IFA has steadfastly supported states and the federal government in
their enforcement efforts when franchisors fail to abide by the law. In fact, the IFA administers
an alternative law enforcement and monitoring program for minor violations of franchise
disclosure laws. When states or the FTC determine that a franchise company has failed to
provide adequate disclosure, one option is referral to the IFAís Sales Compliance Training
Program for mandatory remedial training.

In addition, the IFA provides a free Franchise Ombudsman Program for franchisees who want
to work with a professional conciliator to open up a confidential channel of communication with
their franchisor. The association also works closely with franchisee associations to promote
litigation alternatives through the Franchise Mediation program.
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CNBC for Upcoming Franchising Industry Documentary
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