By Richard E. Johnson | Published April 13, 2021 | Posted in Franchisor | Tagged Tags: Financial Performance, Franchise Agreements, Franchise Law, Franchisors, FTC | Comments Off on Will the FTC Require Franchisors to Make Financial Performance Representations?
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
Read MoreOn 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
Read MoreThe 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
Read MoreMaking 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
Read MoreMaking 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
Read MoreMaking 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
Read MoreMaking 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
Read MoreMaking 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
Read MoreMaking 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
Read MoreMaking 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
Read More
