Washington, DC-- J. Howard Beales, director of the Federal Trade Commission's bureau of consumer protection, testified to the House Subcommittee on Commerce, Trade and Consumer Protection that the FTC has brought over 200 franchise and business opportunity cases against more than 640 entities and individuals since the development of its Franchise Rule in the late '70s. Recently, the Commission announced its seventh joint law enforcement sweep against business opportunity and related schemes and, together with the Department of Justice and other state partners, filed over 70 cases, Beales noted.
According to the testimony, between 1993 and mid-1999, FTC staff analyzed 4,512 franchise and business opportunity complaints in the Commission's Consumer Information System database. Of these complaints, more than 75 percent involve business opportunities. Only 6 percent of the complaints pertained to traditional franchise arrangements. -Federal Trade Commission