With franchisors and franchisees across more than 300 industries, including roughly 200,000 franchise quick service restaurants employing 4 million people, IFA responds to Advance Notice of Proposed Rulemaking warning against a broad rule that would harm restaurant owners and consumers

WASHINGTON, D.C.  – The International Franchise Association (IFA) submitted formal comments urging the Federal Trade Commission (FTC) against proceeding with a rulemaking that would extend its “junk fee” rule broadly to both third party delivery service providers and restaurants and retail offering online food delivery, warning that the proposal would impose severe compliance burdens on small business franchisees and harm consumers by reducing discount opportunities.

In comments responding to the FTC’s Advance Notice of Proposed Rulemaking (ANPRM), IFA argues that the Commission has failed to demonstrate that online food delivery service practices at issue by restaurants are either “unfair” or “deceptive” under Section 5 of the FTC Act, or that they are sufficiently “prevalent” across restaurants offering food delivery to justify a broadly-crafted nationwide rule under Section 18.

“The compliance costs of this rulemaking would be severe, the legal basis is weak, and the practical harms to IFA’s small business members would far outweigh any consumer benefit,” stated Sarah Davies, IFA General Counsel and Executive Director of IFA Law Center. “Our position is clear: we do not believe a rulemaking that will apply uniformly to third party delivery service providers and restaurants who provide optional online food delivery services should proceed. Should the FTC decide to move forward, any rule must apply only to third-party delivery platforms, not to restaurant or retailer owners who offer both pickup and delivery.”

IFA’s members include franchisors and franchisees across more than 300 industries, with an estimated 200,000 franchised quick service restaurants and 4 million employees.

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About the International Franchise Association:

Celebrating over 60 years of excellence, education, and advocacy, the International Franchise Association (IFA) is the world’s oldest and largest organization representing franchising worldwide. IFA works through its government relations and public policy, media relations, and educational programs to protect, enhance and promote franchising and the more than 832,000 franchise establishments that support nearly 8.8 million direct jobs, $907.3 billion of economic output for the U.S. economy, and almost 3 percent of the Gross Domestic Product (GDP). IFA members include franchise companies in over 300 different business format categories, individual franchisees, and companies that support the industry in marketing, law, technology, and business development.