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Federal Trade Commission: Enforcement of the Trade Regulation Rule on Franchising

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Report Type Reports and Testimonies
Report Date July 13, 1993
Report No. HRD-93-83
Subject
Summary:

The Federal Trade Commission (FTC) requires franchisers to give prospective franchise purchasers financial details about the business and explain the arrangements in the franchise agreement. FTC enforces the franchise rule as part of its consumer protection mission. This report provides the following information about FTC's franchise rule: (1) the number of franchise rule investigations and court cases started during fiscal years 1989-92; (2) enforcement problems, such as case-processing delays, at FTC headquarters or regional offices; (3) FTC's effectiveness in working with states to enforce franchise rules and laws; and (4) possible revisions to regulating franchises, such as those contained in legislation proposed during the 102nd Congress. GAO also discusses the outcomes of investigated and litigated complaints, the types of complaints filed, the kinds of franchisers taken to court, and enforcement activities in FTC's Atlanta Regional Office.

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