The Federal Trade Commission is warning franchisors against using “unfair and deceptive practices” against franchisees following a yearlong probe that found some franchisors improperly limited franchisees’ ability to speak to regulators and imposed fees not previously disclosed.
“Franchisee reports and voluntary interviews are a critical part of FTC investigations,” the FTC stated Friday in the policy statement. “If franchisees are unwilling or unable to file reports and discuss their experiences, the FTC’s ability to protect franchisees is weakened. Furthermore, the competitive and consumer protection benefits that flow from the franchise business model are undermined.”
