In the long-simmering conflict between franchisers and franchisees, the federal government has weighed in on behalf of the smaller guys.
In a business relationship that has become fundamental to American commerce, franchisers — brands like McDonald’s and Jiffy Lube — license the right to operate their concept to individual entrepreneurs, who provide start-up capital and may own one location or many.
On Friday, the Federal Trade Commission issued a policy statement and staff guidance that cautioned franchisers not to restrict their franchisees’ ability to speak to government officials or to tack on fees that weren’t disclosed in documents provided to prospective franchise buyers.
In a news release, the commission said it was acting amid “growing concern about unfair and deceptive practices by franchisers — to ensure that the franchise business model remains a ladder of opportunity to owning a business for honest small business owners.”
Persons:
franchisers, weren’t, franchisers —, ”
Organizations:
Federal Trade Commission