Franchise Agreement Regulations

The FTC Rule (which preceded UNIDROIT`s formulation) contained from the outset two exceptions for circumstances in which it was concluded that there was insufficient evidence that a potential franchisee needed disclosure protection: (i) a very small investment and (ii) a “partial deductible” (defined as having had at least some minimum period of previous experience in the same type of business); and the parties expect that the sales resulting from the proposed relationship will not represent more than a certain percentage of the dollar volume of the franchisee`s total expected gross sales. More recently, the FTC has expanded these efforts to limit the FTC`s rule protection to those who need it most and has freed up very large investments and franchisees with significant net assets.

Posted in Uncategorized.