In any event, a lengthy list of exemptions and inclusions will be necessary, including franchises and the types of businesses described above. I FA believes that, at a minimum, the FTC should retain the conditional exemption for trade show promoters. Since trade show promoters lack the resources necessary to effectively monitor the practices of each exhibitor at a trade show, extending such liability to show promoters would have a chilling effect on promoters, reducing the number of shows to the detriment of both franchisors and franchisees. Earnings Disclosures . IFA endorses the FTC's position in the ANPR that earnings claims should not be made mandatory at this time.
Current trends indicate that increasing numbers of franchisors are making earnings claims.
Market forces will incentivize franchisors to provide such disclosures. If a franchisor is faced with two distinct regulatory regimes on earnings claims, it is likely that compliance errors and confusion will result. A franchisor will have to use two materially differentUFOCs depending on the state, and prospective franchisees in certain states will not receive the same information as those in other states. In addition to the obvious needs for federal and state consistency, IFA also believes that the FTC should recognize the diversity of industries involved in franchising. The FTC's final position on this matter should emphasize the need for regulatory flexibility in dealing with franchise earnings claims.