Calls for FTC to Adopt IFA’s Responsible Franchising principles

WASHINGTON – The International Franchise Association (IFA) released the following statement in response to the Federal Trade Commission’s (FTC)’s actions today impacting the franchise business model:

“IFA agrees with bipartisan leaders in Congress that franchising democratizes the American Dream of business ownership,” said Matthew Haller, president and CEO of the International Franchise Association. “The FTC’s actions today are contrary to the reality that the vast majority of franchise relationships are working and that franchising continues to grow each year. We have long supported greater transparency and visibility in the franchise sales process, and IFA encourages the FTC to focus on improving the Franchise Rule by adopting IFA’s 2024 Responsible Franchising policy recommendations, which seek to empower prospective franchisees with the best information possible and clarify both parties’ obligations as part of a franchise agreement.

“Since the FTC issued its March 2023 RFI and IFA released its May 2024 Responsible Franchising platform, IFA has further urged the FTC to avoid broad, sweeping changes that do not consider the diverse nature of the business model. The FTC’s guidance today regarding fee disclosure in franchise agreements stands to unnecessarily restrict franchisors’ ability to innovate and evolve their system and damage the equity of franchisees for whom these FTC actions are purportedly taken.

“IFA will continue to work with the FTC to improve the model for all parties involved and the customers they serve.”

In May, IFA released a series of policy recommendations for franchisor, franchisee, and supplier members to strengthen the franchise relationship through improved pre-sale disclosure. These recommendations are the result of over a year of working group discussions comprised of representatives of the key stakeholders in franchising—franchisors, franchisees and suppliers working to improve the pre-sale process for all parties involved. 

In response to the FTC’s March 2023 Request for Information regarding the franchise relationship, IFA, along with thousands in the franchise community, responded to that request citing how the franchise relationship works as it is designed, while also suggesting commonsense updates to the Franchise Rule in line with IFA’s Responsible Franchising recommendations. 

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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 approximately 806,270 franchise establishments that support nearly 8.7 million direct jobs, $858.5 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.

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