In connection with the offer or sale of a franchise to be located in the United States of America or its territories, unless the transaction is exempted under subpart E of this part, it is an unfair or deceptive act or practice in violation of Section 5 of the Federal Trade Commission Act:
(a) For any franchisor to fail to furnish a prospective franchisee with a copy of the franchisor's current disclosure document, as described in subparts C and D of this part, at least 14 calendar-days before the prospective franchisee signs a binding agreement with, or makes any payment to, the franchisor or an affiliate in connection with the proposed franchise sale.
(b) For any franchisor to alter unilaterally and materially the terms and conditions of the basic franchise agreement or any related agreements attached to the disclosure document without furnishing the prospective franchisee with a copy of each revised agreement at least seven calendar-days before the prospective franchisee signs the revised agreement. Changes to an agreement that arise out of negotiations initiated by the prospective franchisee do not trigger this seven calendar-day period.
(c) For purposes of paragraphs (a) and (b) of this section, the franchisor has furnished the documents by the required date if:
(1) A copy of the document was hand-delivered, faxed, emailed, or otherwise delivered to the prospective franchisee by the required date;
(2) Directions for accessing the document on the Internet were provided to the prospective franchisee by the required date; or
(3) A paper or tangible electronic copy (for example, computer disk or CD-ROM) was sent to the address specified by the prospective franchisee by first-class United States mail at least three calendar days before the required date.
Notes of Decisions
Legacy Academy, Inc. v. Mamilove, LLC, 761 S.E.2d 880 (Ga. Ct. App. 2014).
· cites it 4× “]” 16 CFR § 436.2 (a). The Rules also require that, if a franchisor provides a prospective franchisee “information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets,” there must be “a reasonable basis for the information,” and…”
Presidential Hosp., LLC v. Wyndham Hotel Grp., LLC, 333 F. Supp. 3d 1179 (D.N.M. 2018).
“See 16 C.F.R. § 436.2 (a). The FDD must contain certain information, including, among other things: (i) a brief description of the franchised business; (ii) the total investment necessary to begin operation; (iii) the franchisor-franchisee contract's terms; and (iv) a general…”
SANTIAGO-SEPÚLVEDA v. Esso Stand. Oil Co., 638 F. Supp. 2d 193 (D.P.R. 2009).
· cites it 2× “” 16 C.F.R. § 436.2 (a). It also provides, however, that “the provisions of part 436 shall not apply if the franchisor can establish [that] .”
Camac v. Dontos, 390 S.W.3d 398 (Tex. App. 2012).
“Camac is one of ten defendants 2 the Dontoses sued alleging violations of the Federal Trade Commission franchise rule, 16 C.F.R. §§ 436.2 , 436.9 (2004), the Texas Business Opportunity Act, Tex.”
Vino 100, LLC v. Smoke On Water, LLC, 864 F. Supp. 2d 269 (E.D. Pa. 2012).
“16 C.F.R. §§ 436.2 , 436.5. A franchisor’s failure to disclose the information required by Rule 436 is an unfair or deceptive trade practice that violates § 5 of the Federal Trade Commission Act.”
Stewart v. Lucero, 918 P.2d 1 (N.M. 1996).
“16 C.F.R. § 436.2 (a) (first emphasis in original, subsequent emphasis added).”
Rodopoulos v. Sam Piki Enter., Inc., 570 So. 2d 661 (Ala. 1990).
“" "Personal meeting" is defined at 16 C.F.R. § 436.2 (o) as a "face-to-face meeting between a franchisor or franchise broker (or any agent, representative, or employee thereof) and a prospective franchisee which is held for the purpose of discussing the sale or possible sale of…”
— 16 C.F.R. § 436.2(a) — 1 case
— 16 C.F.R. § 436.2(a)(2) — 1 case
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