Sixteen National Business Groups Urge Congress to Preserve FTC Franchise Rule

June 08, 2022

New letter led by the International Franchise Association stresses the importance of the Franchise Rule to continue creating opportunities in franchising for entrepreneurs and workers alike

WASHINGTON, June 8 – The International Franchise Association (IFA) today led 16 business groups in urging Congress and the Federal Trade Commission (FTC) to work together to preserve the FTC’s Franchise Rule, which is under its 10-year review. In letters to the U.S. House and Senate commerce committees, the industry groups detail how the Franchise Rule helps promote business ownership and support economic growth.

“During the economic recovery, there has never been a better time for entrepreneurs and workers to be in franchising,” said Michael Layman, Senior Vice President of Government Relations and Public Affairs for the International Franchise Association. “The franchise sector is growing faster than the rest of the economy, franchisee satisfaction has never been higher, and franchise workers enjoy greater advancement opportunities and higher wages than non-franchise small business workers. Thus, we urge Congress and the Federal Trade Commission to work together to preserve the Franchise Rule that has helped to expand opportunities for entrepreneurs and workers of all backgrounds.”

The letter states, “The Rule affords current and prospective franchise owners information they need to weigh the risks and benefits of a business investment…This has led to successfully creating pathways to entrepreneurship for business owners of all backgrounds and enabled these owners to create wealth in communities across the nation. The Franchise Rule was last updated more than a decade ago following a consensus-based process that delivered clear guidelines for franchisors to follow and transparent information for prospective franchise owners before making an investment.”

The FTC Franchise Rule has been the primary federal regulation governing the franchise sector since 1978, requiring franchisors to provide essential information to prospective franchisees. The Rule is reviewed every ten years.

According to recent research by Oxford Economics, franchised businesses provide better wages, up to 3.4% higher, and more generous benefits than their non-franchised counterparts. Nearly one-third of all franchise owners say they would not own a business without franchising, offering entrepreneurial opportunities that would not otherwise be available, especially to women, people of color, and veterans.

The letters were signed by 16 groups representing business and industries involved in franchising, including:

American Hotel & Lodging Association

American Staffing Association

Home Care Association of America

International Franchise Association

International Health Racquet and Sportsclub Association

International Sign Association

National Association of Convenience Stores

National Association of Realtors

National Association of Women Business Owners

National Council of Chain Restaurants

National Restaurant Association

National Retail Federation

Small Business & Entrepreneurship Council

U.S. Black Chambers, Inc.

U.S. Chamber of Commerce

Workplace Policy Institute

Read the full letters to the House and Senate.

# # #