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Too Little, Too Late: The Franchisee's Perspective on the Revised FTC Franchise Rule

By Susan P. Kezios
April 27, 2007

The Federal Trade Commission ('FTC') labored a dozen years to revise its Franchise Rule ' only to give birth to a mouse.

The American Franchisee Association ('AFA') was actively involved in the Rule review process since its beginning in 1995. The AFA submitted written comments and participated in public workshops in both 1995 and 1996. In 1997, after the FTC published an Advanced Notice of Proposed Rulemaking ('ANPR'), the AFA submitted written comments again ' along with 70 franchisees representing 20 independent associations of franchisees. The AFA suggested that regional workshops be held in order that franchisees might be better able to have their comments included on the record. The FTC responded to the AFA's request and held six public workshop conferences in which the second day was an open forum in which the public was invited to express its views. Franchisees from another 15 independent franchisee associations, all members of the AFA, participated in these public conferences. After the ANPR workshops, the FTC published a Notice of Proposed Rulemaking ('NPR') in 1999 to which the AFA again submitted written comments.

By 2002, the AFA had convinced the U.S. House to hold a hearing on the enforcement of the FTC's Franchise Rule, 23 years after its promulgation (American Franchisee Association, Statement of Susan P. Kezios, president, before the U.S. House of Representatives Subcommittee on Commerce, Trade and Consumer Protection, Committee on Energy and Commerce). In August 2004, the FTC issued its Staff Report on the Franchise Rule, to which the AFA again submitted written comments. All along the way, the AFA encouraged its Affiliate Members of the franchisee bar to participate in the Rule review process; a dozen franchisee law firms actually did so.

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