Exemptions and Prohibitions in the New Franchise Rule

The New Franchise Rule deletes the four exclusions in the existing Rule for employer-employees and general partnerships, cooperative organizations, testing or certification services, and single trademark licenses, since a revised definition of 'franchise' in the Rule obviates the need for these exclusions. The New Rule retains the exemption for franchise sales under $500, fractional franchises, and leased departments, while adding an exemption for petroleum marketers governed by the Petroleum Marketing Practices Act, as well as for three categories of 'sophisticated investor.'

8 minute read May 31, 2007 at 12:29 PM
By
Daryl A. Hart
Exemptions and Prohibitions in the New Franchise Rule

The New Franchise Rule deletes the four exclusions in the existing Rule for employer-employees and general partnerships, cooperative organizations, testing or certification services, and single trademark licenses, since a revised definition of 'franchise' in the Rule obviates the need for these exclusions.

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