FTC Official Testifies on Commission's Enforcement of Franchise Rule
Washington, DC-- J. Howard Beales, director of theFederal Trade Commission's bureau of consumer protection,testified to the House Subcommittee on Commerce, Trade and ConsumerProtection that the FTC has brought over 200 franchise and businessopportunity cases against more than 640 entities and individualssince the development of its Franchise Rule in the late '70s.Recently, the Commission announced its seventh joint lawenforcement sweep against business opportunity and related schemesand, together with the Department of Justice and other statepartners, filed over 70 cases, Beales noted.
According to the testimony, between 1993 and mid-1999, FTC staffanalyzed 4,512 franchise and business opportunity complaints in theCommission's Consumer Information System database. Of thesecomplaints, more than 75 percent involve business opportunities.Only 6 percent of the complaints pertained to traditional franchisearrangements. -Federal Trade Commission