The International Franchise Association (IFA) has formally called on the Federal Trade Commission (FTC) to shift its focus away from elevated regulation of the franchise enterprise mannequin, arguing that the fee’s current actions exceed its authority. In response to the FTC’s re-opened request for info (RFI) on franchisor practices, the IFA highlighted concerns that the FTC’s current policy statement and staff guidance undermine the franchise mannequin’s viability and exceed the company’s authority.
An FTC RFI is a proper name for public enter on particular subjects or points beneath the company’s jurisdiction. This course of is a part of the FTC’s investigative or regulatory actions and gathers suggestions, information and views from stakeholders, together with companies, trade specialists and most of the people.
“Regardless of all accessible authorized, empirical, and anecdotal proof on the contrary, the FTC appears to be working beneath the false premise that franchisor management is inherently unhealthy for franchisees,” IFA president and CEO Matt Haller advised Entrepreneur in an announcement. “Imposing unilateral, substantial and burdensome laws on the franchise group will lead to important hurt on present and future franchisees and scale back the viability of the franchise mannequin.”
Haller expressed concern over what he described because the FTC’s false impression of franchisor standards and cited federal courtroom rulings and research demonstrating that franchisees profit from constant franchisor requirements, enhancing operational uniformity and client expertise.
The IFA and 1000’s throughout the franchise group have expressed that overly broad regulation would put franchised companies at an obstacle in comparison with non-franchised companies, lowering competitors and limiting franchisee fairness. As a substitute, the IFA recommends the FTC prioritize modernization of the Franchise Rule, significantly round presale disclosures, a shift supported by bipartisan members of Congress, state regulators, and the Authorities Accountability Workplace.
To assist these targets, the IFA has already spearheaded transparency updates, together with the Could 2024 launch of its Responsible Franchising ideas to function a roadmap for bettering transparency and disclosure throughout the franchise group.
The IFA was among the many standout performers in APCO’s 10th annual TradeMarks study, which surveyed congressional staffers, officers from the Biden administration and enterprise leaders throughout June, July and August. The examine measured the effectiveness of commerce associations throughout 15 crucial standards, together with lobbying efforts, popularity administration and coalition-building capabilities.
The IFA was named the highest affiliation in three of the 15 main classes: membership mobilization, bipartisanship and coalition-building, edging out rivals just like the National Retail Federation and the American Bankers Association.
Associated: See The Entrepreneur 2024 Top Franchise Supplier List
