Since the coronavirus pandemic was first declared an emergency here in the United States, we’ve been making slow, but steady progress and we’re now starting to see the fruits of those efforts. Oh, not with regard to COVID. I’m talking about the FTC Franchise Rule and government efforts to clamp down on abusive franchisors, and eliminate some of the bad apples within franchising.
Last month, the Federal Trade Commission referred a complaint against Burgerim to the U.S. Department of Justice, which promptly filed suit against the wayward franchisor in a four-count indictment. DOJ alleged false and misleading representations to potential franchisees; non-disclosure of required information in the FDD; inaccurate or non-disclosure of required Financial Performance Representations; and claims and representations contradicting required disclosures, each of which stands in direct violation of the FTC Franchise Rule.