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Will the FTC Require Franchisors to Make Financial Performance Representations?

In late 2020, the Federal Trade Commission held a virtual public workshop.  The workshop addressed whether the utility of the FTC Franchise Rule (“Disclosure Requirements and Prohibitions Concerning Franchising,” 16 CFR Part 436) could be enhanced. The workshop was part of a systematic review of all FTC regulations and portends potential revisions to the FTC Franchise Rule. Parts Read More

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On Dangerous Ground

Franchisors often give prospective franchisees questionnaires. The questionnaires have various names, like “Prospective Franchisee Questionnaire” or “Statement of Prospective Franchisees.” They are commonly referred to simply as “Questionnaires.” Questionnaires usually have three material parts. The first part asks the prospective franchisee (or in the case of a company, the company’s owners) questions about the relationship Read More

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The French Connection

We had the pleasure of meeting with a number of top franchisors and top franchise attorneys in Paris.  Our meetings were very productive.  We structured two transactions in compliance with French and American law.  In the process, we also built solid international relationships. France has specific franchise statutes.  In fact, France was the first country Read More

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Making Money as a Franchisor: Charging Fees for Services

This blog previously discussed the common ways a franchisor makes money.  As we noted, almost all franchisors charge the following fees: An initial franchise fee; A periodic (weekly or monthly) royalty; A development fee or territory fee; and A periodic advertising fee. We also began discussing less-common ways a franchisor makes money.  These were: Charging Read More

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Making Money as a Franchisor: Sale of Products and Services to Franchisees

This blog previously discussed the common ways a franchisor makes money.  As we noted, almost all franchisors charge the following fees: An initial franchise fee; A periodic (weekly or monthly) royalty; A development fee or territory fee; and A periodic advertising fee. We also began discussing less-common ways a franchisor makes money.  The first of Read More

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Making Money as a Franchisor: Lease of a Turnkey Business

This blog previously discussed the common ways a franchisor makes money.  As we noted, almost all franchisors charge the following fees: An initial franchise fee; A periodic (weekly or monthly) royalty; A development fee or territory fee; and A periodic advertising fee. We also began discussing less-common ways a franchisor makes money.  The first of Read More

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Making Money as a Franchisor: Developing Franchisees’ Sites

This blog previously discussed the common ways a franchisor makes money.  As we noted, almost all franchisors charge the following fees: An initial franchise fee; A periodic (weekly or monthly) royalty; A development fee or territory fee; and A periodic advertising fee. There are, however, other sources of revenue.  Many of these can provide significant Read More

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Making money as a franchisor: Advertising Fees

This post is the fifth installment of the post dated March 17, 2015, titled “How Do I Make Money as a Franchisor?”  This installment will treat Advertising Fees. Most franchisors charge “Advertising Fees,” or “Ad Fees.”  “Ad Fees” are continuing fees franchisors charge franchisees for advertising and promotional efforts by the franchisor. Ad Fees may be Read More

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Making money as a franchisor: Development Fees

This post is the fourth installment of the post dated March 17, 2015, titled “How Do I Make Money as a Franchisor?”  This installment will treat Development Fees, sometimes known as “Territory Fees.” Most franchisees want to operate more than one outlet, and most franchisors want them to do so.  There are many advantages to Read More

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Making money as a franchisor: Royalties

This post is the third installment of the post dated March 17, 2015, titled “How Do I Make Money as a Franchisor?”  This installment will treat Royalties. Most franchisors charge a “Royalty.”  The “Royalty” is the continuing fee franchisors charge franchisees for the license to use the trademarks and the system. Royalties are usually based on Read More

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RICHARD E. JOHNSON
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