Franchise bills would have broad impact

Article Abstract:

Two bills were introduced in the House of Representatives in 1992 which would augment the disclosures franchisors are required to provide potential purchaser-franchisees. The Federal Franchise Disclosure and Consumer Protection Act would require franchisors to give prospective franchisees a report of financial operating results which could reasonably be expected. The Federal Fair Franchise Practices Act would mandate certain standards of conduct for franchisor-franchisee transactions. The duty of due care imposed on franchisors would be groundbreaking in franchise law.

Financial disclosure

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Franchise law; dealer terminations

Article Abstract:

State laws often impose conditions on a manufacturer's ability to terminate a franchisee, and many franchise laws only permit termination for "good cause," usually defined as some failure or deficiency by the dealer, such as bankruptcy. A manufacturer's economic justification for the termination is rarely such "good cause." Case law has, however, occasionally stated that the good cause inquiry must include an analysis of the manufacturer's economic justification for termination.

States

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Franchise law; disclosure proposals

Article Abstract:

Changes contemplated by the proposed revision of the FTC Franchise Rule of 1979, which governs franchise sales by mandating presale comprehensive disclosure to prospective franchisees, are discussed. The absence of the FTC Franchise Rule's own disclosure format will be the key change noticed.

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