U.S. Senators Urge FTC to Preserve the Franchise Rule

Signed by bipartisan group of 14 senators, letter is Capitol Hill response to hundreds of franchising leaders advocating on importance of the rule to franchising

WASHINGTON, Dec. 12, 2022– The International Franchise Association (IFA) today applauded a bipartisan letter sent by 14 U.S. Senators 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 following a similar letter from a bipartisan group of 67 members of the U.S. House.

“This letter shows the broad bipartisan support for the Franchise Rule and, more importantly, the all-American franchise business model,” 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.”

During IFA’s annual fly-in in September, hundreds of franchisors, franchisees, and suppliers met with their representatives on Capitol Hill asking for support of the letter. In addition, in June, IFA led 16 business groups in pushing the FTC to preserve the Franchise Rule in its current form, saying, “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 Senate letter was led by U.S Sens. Jerry Moran (R-KS) and Gary Peters (D-MI) and signed by U.S. Sens. Roger Marshall (R-KS), John Hickenlooper (D-CO), Mike Braun (R-IN), Kyrsten Sinema (D-AZ), James Inhofe (R-OK), Angus King (I-ME), Susan Collins (R-ME), Chris Coons (D-DE), Marco Rubio (R-FL), Tom Cotton (R-AR), Roger Wicker (R-MS), and John Boozman (R-AR).

The senators call for preservation of the FTC Franchise Rule in its current form, saying, “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.

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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 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.