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Franchise Legal Considerations Business Articles | June 24, 2003
Franchise Legal ConsiderationsOne of the most important events in franchising is the introduction of the Franchise Rule on October 21, 1979 by the Federal Trade Commission (FTC). The FTC Franchise Rul...


Franchise Legal Considerations

One of the most important events in franchising is the introduction of the Franchise Rule on October 21 Wholesale Jerseys From China , 1979 by the Federal Trade Commission (FTC). The FTC Franchise Rule requires all franchisors operating anywhere in the U.S. to make full disclosure of the information that a prospective franchisee needs in order to make a rational decision about whether or not to invest.

In effect, the rule obliges franchisors to meet certain FTC standards, such as ensuring that a reasonable basis for any claims exists, that the disclosure has been prepared in accordance with accepted accounting principles Wholesale Jerseys China , and that there is evidence to support the financial claims, and that the franchisee, among others, can see this evidence.

In particular Wholesale Jerseys , the disclosure rule requires that the franchisor provide information about:

(a) The franchisor and its affiliates, describing the business experience of each of its officers, directors, and management personnel responsible for franchise services Cheap MLB Jerseys , training, and other aspects of its program.