On February 1, 2022, Rep. Jan Schakowsky (IL-9) introduced H.R.6551, the Franchisee Freedom Act. This legislation simply gives franchisees a private right of action against franchisors that violate the Federal Trade Commission’s Franchise Rule. This is a reform the AAFD has urged since our formation 30 years ago, and we applaud this legislation and urge all AAFD members to voice their support for passage.
In a recent article, well respected franchisee attorney, and AAFD Franchisee LegaLine℠ member, Ron Gardner said,
“In short, while franchisors are required to comply with the FTC Franchise Rule in making presale disclosures, the Rule has no private right of action for violations of its requirements. Therefore, if a franchisee believes that he or she has been misled by a Franchise Disclosure Document that does not comply with the Rule, the only course of action is to file a complaint with the FTC and hope something is done about it. There is no ability to recover any money or to otherwise pursue the franchisor for its wrongful conduct. Add to that problem that for a myriad of issues having to do with budgets, politics and otherwise, the FTC has only undertaken one significant investigation of a franchisor in the past 20 years. Giving franchisees the right to pursue violations of this Rule on their own should go far in making sure unscrupulous franchisors will have to face the consequences of their actions.” i
It’s time for franchisees to act and have a basic American right, the right to the courts for those that have been misled during the presale disclosure period. We urge you to contact your member of the House of Representative and ask them to cosponsor H.R.6551.
To contact your Representatives go to www.house.gov. Use the Find Your Representative lookup. You may be asked to enter your full address. From there, you will be able to go to your members webpage. On their webpage, you should be able to find a way to contact them via email. Fill in your personal information as needed. Then copy and paste the following into the text block:
I am a franchisee and job creator in your district and am a member of the American Association of Franchisees and Dealers (AAFD), the oldest and largest national not for profit trade association advocating the rights and interests of franchisees and independent dealer networks. I am writing you to support a basic American right, access to the courts.
Representative Jan Schakowsky (IL-9) has introduced H.R.6551, the Franchisee Freedom Act. This legislation simply gives franchisees a private right of action against franchisors that violate the Federal Trade Commission’s Franchise Rule. While franchisors are required to comply with the Rule, the Rule has no private right of action for violations of the Rule. H.R.6551 would give franchisees the right to pursue violations of this Rule making sure unscrupulous franchisors are held accountable for their actions.
I ask you to support the Franchise Freedom Act and add your name as a cosponsor.
If you have questions, feel free to contact AAFD’s Director of Public Affairs and Engagement, Keith Miller, at email@example.com
i A Rebalance of Power by Ron Gardner, New York Law Journal, https://www.law.com/newyorklawjournal/2022/03/30/a-rebalance-of-power/