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 In This Issue of AFA's Blast FaxRepresenting the interests of small business franchisees nationally. July 2000 |
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AFA PROMPTS
SENATE REQUEST FOR FTC AUDIT
Actions
of the AFA Board of Directors
New Members
New AFFILIATE
MEMBERS |
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�There�s one thing
stronger than all the armies in the world, and that is an Idea who�s
time has come.� �Victor
Hugo |
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On June 27, 2000, three
United States Senators sent a letter to the Comptroller General of the
United States requesting an audit of the Federal Trade Commission�s
(FTC) Franchise Rule formally titled, �Disclosure Requirements and
Prohibitions Concerning Franchising and Business Opportunity Ventures.� Senators Thad Cochran
(R-MS), Charles Grassley (R-IA) and Susan Collins (R-ME) have asked the
Comptroller General to follow-up on a July 1993 GAO audit of the FTC.
Senator Collins Chairs the Senate Government Affairs� Permanent
Subcommittee on Investigations. Senator
Grassley chairs the Senate Judiciary Committee�s Subcommittee on
Administrative Oversight and the Courts. The
July 1993 audit of the FTC�s enforcement of the Franchise Rule found
that the FTC acted on less than 6% of all franchise complaints brought to
it and took just 2% of those complaints to federal court.
No distinction was made between franchise cases and business
opportunity cases in the 1993 audit. The
June 27, 2000 letter to the Comptroller General specifically asks the GAO
to distinguish between complaints concerning franchises from those
involving business opportunities.
It further asks the GAO to distinguish between those franchise
complaints that involve pre-sale disclosure issues versus post-sale
relationship issues, and to categorize the complaints received. Over
the years the AFA has urged the FTC to investigate the post-sale business
practices of certain franchisors.
While the FTC promotes the use of pre-sale disclosure documents in
the franchise sales process it refuses to become involved in and has been
totally ineffective in promoting fairness and free competition in the
franchise relationship.
FTC staff has routinely stated over the years that they lack enough
resources to act on all meritorious franchise complaints.
FTC staff has further stated that they have very limited
jurisdiction with regard to post-sale bad faith business practices of
certain franchisors. The AFA believes that once the GAO acts on the Senators� request, new data will be available to demonstrate the need for additional Congressional oversight in franchise relationships similar to the baseline standards of conduct sought by Congressmen Howard Coble (R-NC) and John Conyers (D-MI) in HR 3308, the Small Business Franchise Act. |
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The Board of Directors of the American Franchisee Association (AFA) met in Chicago, Illinois on June 23, 2000 to conduct the business of the association. Among other items, the Board passed the following three resolutions Dues Structure
for Individuals & Associations The AFA Board of
Directors reaffirmed the current dues structure for individual and
association members. Individual members of the AFA will continue to
pay the previously established dues rate of $100 per franchised outlet per
year. This amount is capped at $2,500. For example, if an
individual owns three franchised outlets, he/she would pay $300 per year
in dues to the AFA. If an individual owns 25 franchised outlets,
he/she would pay $2,500 per year in dues to the AFA. If an
individual owns 26 or more franchised outlets, that individual would not
pay more than $2,500 per year. Association members
of the AFA will continue to pay $25 per franchised outlet. For
example, an association comprised of 300 franchised outlets pays $7,500 in
dues per year. There is, however, a minimum amount required of
association members. The minimum amount required is $2,500.
For example, an association comprised of 50 franchised outlets would pay a
minimum of $2,500 in dues instead of $1,250 (50 outlets X $25). Association member
dues are capped at $60,000. An association comprised of 2,400
franchised outlets will pay $60,000 in dues per year (2400 X $25).
However, with the cap, an association comprised of 4,000 franchised
outlets will also pay $60,000 in dues (instead of $100,000). Affiliate Dues
The AFA Board of Directors voted for the first time since the AFA�s inception to increase Affiliate Member Dues from $1,200 to $1,500 per year beginning October 1, 2000. Principals and/or partners who desire a primary listing will pay $1,500. A secondary membership for associates was established at $750. Associates at law firms cannot purchase secondary memberships if there is no primary membership listing. In this example an associate would pay the primary listing rate of $1,500.
WELCOME
NEW AFFILIATE MEMBERS
We are happy to welcome the following three new Affiliate Members to the American Franchisee AssociationJOHN J. ALLAN
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AFA PAC
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YES,
I want to fund candidates who support issues important to small business franchisees. I
understand that my contribution is not tax deductible and that a corporate check cannot be
accepted. You may proceed to our on-line secured contribution form or print and fax/mail
our form.|
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The
American Franchisee Association