July 19, 2024

FTC Announces New Efforts Targeting Unfair and Deceptive Franchisor Practices

Cozen O'Connor

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The FTC announced that it has taken multiple actions to address growing concern about unfair and deceptive practices by franchisors.
The FTC released a Policy Statement on Franchisors’ Use of Contract Provisions, Including Non-Disparagement, Goodwill, and Confidentiality Clauses, which warns franchisors that the use of contract provisions, such as non-disparagement clauses that prohibit franchisees’ communications with the government, is unlawful and contrary to public policy; issued Staff Guidance on the Unlawfulness of Undisclosed Fees Imposed on Franchisees, which makes clear that it may be an unfair act or practice if a franchisor imposes or collects a new fee that was not disclosed in the franchise disclosure document and included in the franchise agreement; published an Issue Spotlight: Risks to Small Business Success in Franchising, which summarizes the concerns raised by franchisees in response to the FTC’s 2023 Request for Information; and launched a new franchise website, which allows stakeholders to submit franchise-related complaints.
The FTC also reopened the public comment period for its 2023 Request for Information, and members of the public may submit comments until October 10, 2024.

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Federal Trade Commission (FTC)

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Franchise Agreements

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Franchises

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Hidden Fees

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Non-Disparagement Provisions

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State Attorneys General

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Unfair or Deceptive Trade Practices

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Antitrust & Trade Regulation

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Consumer Protection

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Franchise

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FTC Announces New Efforts Targeting Unfair and Deceptive Franchisor Practices

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