Bipartisan House Members to FTC: Support Franchising

At a time when the FTC is targeting franchising, bipartisan Members of Congress caution the Commission from acting beyond its jurisdiction to harm franchise businesses; cite lack of “legitimate basis” for recent Request for Information

WASHINGTON – The International Franchise Association (IFA) today applauded a group of bipartisan members of the U.S. House of Representatives, who sent a letter to the Federal Trade Commission (FTC) with concerns about the agency’s recent activity threatening the franchise model. Citing the Commission’s March 10 Request for Information (RFI), the congressmen caution that this recent activity does not align with the “statutory jurisdiction or mission of the agency” and that there is no “legitimate basis for the commission’s inquiry.”

“IFA thanks this bipartisan group for standing up for the franchise business model, bringing to light the FTC’s overreach and damaging inquiry into franchising,” said Michael Layman, IFA senior vice president for government relations and public affairs. “We urge the FTC to heed their concerns and instead focus on the Franchise Rule and improvements to pre-sale disclosure, which actually fall within its jurisdiction.”

The letter, led by John Moolenaar (R-MI), was signed by a bipartisan group of twelve Members of Congress including Rick Allen (R-GA), Troy Balderson (R-OH), Larry Bucshon (R-IN), Jerry Carl (R-AL), Henry Cuellar (D-TX), Josh Gottheimer (D-NJ), Kevin Hern (R-OK), Ashley Hinson (R-IA), Kevin Kiley (R-CA), Jimmy Panetta (D-CA), and Tim Walberg (R-MI).

They write:

“While the FTC has jurisdiction over pre-sale disclosure in franchising, the commission’s recent RFI concerning franchisors is an effort that does not align with the statutory jurisdiction or mission of the agency. Also, there is little evidence of growing unfair or deceptive practices as cited in the RFI that would serve as a legitimate basis for the commission’s inquiry.”

“Franchising is an American business model that generates a path for career development and entrepreneurship for people of all backgrounds across the country…we ask that the FTC exercise caution to ensure that it does not act beyond its mission and undermine this successful business model for the millions of Americans who benefit from it every day.”

Read the full letter here.

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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 790,492 franchise establishments that support nearly 8.4 million direct jobs, $825.4 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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