Dozens of U.S. House Members Urge FTC to Preserve the Franchise Rule
Signed by 67 Members of Congress, letter is Capitol Hill response to hundreds of franchising leaders advocating on importance of the rule to franchising
WASHINGTON, Oct. 18, 2022 – The International Franchise Association (IFA) today applauded a bipartisan letter sent by 67 members of the U.S. House of Representatives to the Federal Trade Commission (FTC) in support of preserving the Franchise Rule, which is under is decennial review. The letter is a result of IFA leadership and advocacy on the importance of the Franchise Rule to providing information and clarity to current and prospective franchise owners. The letter comes shortly after IFA’s annual fly-in where hundreds of franchisors, franchisees, and suppliers met with their representatives on Capitol Hill asking for support of the letter.
“This letter shows the broad bipartisan support for the Franchise Rule and, more importantly, the all-American business model of franchising,” said Michael Layman, IFA senior vice president for government relations and public affairs. “Franchising is one of the greatest avenues for entrepreneurship, especially for underrepresented communities, and the Franchise Rule will continue to empower franchise owners to make investment decisions and provide career experience and advancement to workers of all backgrounds.”
The letter, led by U.S. Reps. Tom O’Halleran (D-AZ) and Brett Guthrie (R-KY) and signed by 67 bipartisan members of the U.S. House, calls for preservation of the FTC Franchise Rule in its current form. It reads, “We believe that the FTC Franchise Rule has helped empower current and prospective franchise owners by requiring clear and consistent disclosure of information at the outset of all franchise relationships, and thus it has fostered an economic landscape that has led to 792,014 establishments currently using the franchise business format in the U.S.”
Read the full letter here.
The Federal Trade Commission (FTC) Franchise Rule has been the primary federal regulation governing the franchise sector since its issuance in 1978, requiring franchisors to prepare an extensive disclosure document known as a Franchise Disclosure Document (FDD) for prospective franchise purchasers. The Franchise Rule has helped empower current and prospective franchise owners by requiring clear and consistent disclosure of information at the outset of all franchise relationships, and thus it has fostered an economic landscape that has led to nearly 800,000 franchised businesses in the U.S., employing over 8.2 million people.
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 775,000 franchise establishments that support nearly 8.2 million direct jobs, $787.7 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.