of International Franchise Association (IFA) has officially CALLED THE Federal Trade Commission (FTC) to shift its focus away from increased regulation of the franchise business model, arguing that the commission's recent actions exceed its authority. In response to the FTC reopened request for information (RFI) to the franchisor practices, IFA stressed the concerns that the recent FTC policy statement AND staff guidance undermine the viability of the franchise model and exceed agency authority.
An FTC RFI is a formal call for public input on specific topics or issues under the agency's jurisdiction. This process is part of the FTC's investigative or regulatory activities and gathers feedback, data, and perspectives from interested parties, including businesses, industry experts, and the general public.
“Despite all available legal, empirical and anecdotal evidence to the contrary, the FTC appears to be operating under the false premise that franchisor control is inherently bad for franchisees,” said IFA President and CEO Matt Haller. entrepreneur in a statement. “Imposing one-sided, substantive and burdensome regulations on the franchise community will result in significant harm to existing and prospective franchisees and reduce the viability of the franchise model.”
Haller expressed concern over what he described as the FTC's misunderstanding franchisor standards and cited federal court decisions and studies demonstrating that franchisees benefit from consistent franchisee standards, enhancing operational uniformity and the customer experience.
The IFA and thousands within the franchise community have argued that overbroad regulation would put franchise businesses at a disadvantage compared to non-franchise businesses, reducing competition and limiting franchise capital. Instead, the IFA recommends the FTC prioritize the modernization of Rule of exclusivityespecially around pre-sale disclosures, a change supported by bipartisan members of Congress, state regulators and the Government Accountability Office.
To support these aims, the IFA has already led transparency updates, including its release in May 2024 Responsible franchising principles to serve as a guide for improvement tRANSPARENCY and disclosure throughout the franchise community.
IFA was among the prominent performers at the APCO's 10th Annual Trademark Studywhich surveyed congressional staffers, officials from the Biden administration and business leaders during June, July and August. The study measured the effectiveness of trade associations across 15 critical criteria, including lobbying efforts, reputation management and coalition building skills.
IFA was named the best association in three of 15 key categories: membership mobilization, bipartisanship and coalition building, beating out competitors such as National Retail Federation AND American Bankers Association.
Related: See the list of top franchise suppliers of Entrepreneur 2024
