The Federal Trade Commission’s comprehensive approach to address concerns about franchisors exploiting their control over franchisees would be better served through case-by-case oversight of the industry, franchise lawyers said this week.
In a policy statement last week, the FTC warned franchisors against imposing nondisparagement agreements on franchisees that limit or could be perceived as restricting their freedom to speak to regulators. The agency also released guidance calling on franchisors to comply with the FTC’s Franchise Rule, which requires them to disclose all fees to franchisees in a Franchise Disclosure Document.
