All franchise companies have mandatory pre-sale disclosures to all buyers and in many states there are required disclosures for Business Opportunities, but not all states. The Federal Trade Commission (FTC) is proposing separating the Franchise Rule and have a special category for Business Opportunities and in these new proposed rules Business Opportunities no matter if their states has no disclosure rules would have to disclose certain information to all buyers. In the FTCs proposed rule making official report they have come up with what they believe will be fair to all consumer buyers of Business Opportunities (Biz Ops) and below is an excerpt; Reduced Mandatory Disclosures The proposed Business Opportunity Rule contains five mandatory disclosures pertaining to earnings claims, lawsuits, refund policy, cancellation and refund requests, and references. With respect to earnings claims, business opportunity sellers must disclose whether or not they make earnings claims. However, the decision to make an earnings claim is optional. While the disclosures of references and earnings claims retain, for the most part, the current Franchise Rule requirements, the required disclosures for lawsuits and refund requests are reduced from the Franchise Rule. Since these are only proposed rules by the FTC for Biz Ops and they are not set in stone as of yet if you are a Business Opportunities specialist or seller you may wish to make your personal input well known to the FTC in a public comment to be considered. Think on this in 2006. |
