Underneath the Golden Boy - Robson Hall Faculty of Law

Franchise Law Consultation Paper 2007 271
• a summary of all material litigation commenced by franchisors against
their franchisees during the preceding year (currently only litigation by
franchisees must be disclosed);
• identification of the officers, directors or managers of a franchisor’s
corporate parent who will exercising management responsibility relating
to the franchise;
• all government litigation against a franchisor affiliate that sold
franchises within the previous ten years;
• a statement as to whether any officer of the franchisor has an interest in
any required supplier;
• information as to how the franchisor or an affiliate may compete with
franchisees through distribution channels such as the internet,
catalogue sales, telemarketing, co-branding or the establishment of
units at ‘nontraditional locations’;
• expanded disclosure with respect to franchisee territories, including the
conditions under which a franchisor will approve franchisee relocation
and the establishment of additional outlets, any present plans of the
franchisor to operate a competing franchise system, the limits on
franchisee solicitations outside assigned territories and a warning of
possible adverse consequences if the franchisee will not have exclusive
territorial rights;
• an explanation of the franchisor’s renewal policies, including any
obligation to sign a new franchise agreement on different terms at
renewal;
• a statement that franchisors are permitted to make financial
performance representations in the disclosure documents, and, if none
appear in the documents, franchisees should disregard other
representations and report them to government agencies;
• information as to whether a franchise unit has been the subject of
repeated sales to different franchisees;
• contact information for each affiliated trademark-specific franchisee
association; and
• information as to whether any current or former franchisees are
restricted from speaking freely due to a confidentiality agreement. 163
163
Ibid; Stadfeld, supra note 10; P. Reap, FTC Issues New Franchise, Business Opportunity Rules,
Wolters Kluwer Law & Business (2007), online: (date accessed: May 12, 2007); A. Marks and K. Klein, “FTC Franchise Rule 2.0”
14:1 Consumer Protection Update (Spring 2007), online:
(date accessed: May 12, 2007).