The FTC Franchise Rule maybe changed, as the Federal trade Commission has put out a report to the franchising industry as to upgrade the rule. If enacted will it will trigger hardship for private sector and cost many trees their lives; Paperwork. If this rule is passed; tree MUST die because everyone will have to their already 200 plus page franchise disclosure documents.
Franchise companies will have to add clauses that state; even though we offered you a franchise with the delivering of offering, we reserve the right to change our minds and refuse to sell you a franchise, so technically you have UFOC but we did not offer you anything yet. And then there will be a suit and new case law until that issue is rectified. Again more waste. Very similar to the employment law folders and binders that we have to maintain and the application forms that are constantly changing, which have to be different in each and everyone one of the 50 states. What a waste of money. We had figured if we gave a UFOC to everyone who inquired online about our company the cost would be in those 2002 figures approximately $37,000 per year expense, which is conservative in the actual calculation. That is about 4,600 or so UFOCs, not quite 48 stories high and that is at previous cost figures and we are a small franchisor the larger ones are ten times as big and ten times that cost. None of which is cost-effective.
Now mind you I realize that if you stack every page of OSHA laws on top of one another it is 56 stories, so the Federal Trade Commission workers do not see a problem with a mere 48 stories of UFOCs, but I do. Are you kidding me? The FTC wants me to print 48 stories of paper documents. Please enlighten me as to how again these UFOCs are so "cost effective?" Remember we are little franchisor comparatively speaking. The actual printing costs are over $24,000 without the postage. And don't tell me the FTC wants me to email these documents they take up 2.1 megabits. Are you paying for the bandwidth? And do you really think your good friends at AOL (that lobbied you to attack Bill Gate's because they were running out of room to hype their inferior products) are going to appreciate this. Are the consumers you are helping by tying up their email and crashing their system as they wait for half an hour (if they are still on dial-up) to download their emails that day really going to be saved? Is this helping them?
The reason I bring this up is part of the mission statement of this report is that the Federal Trade Commission wants to upgrade the UFOC to reflect the new technologies. Then in the future it makes sense to email the documents, probably in an RTF or a PDF file or if to Europe a DiVu file (LizardTech DiVu files similar to the Adobe Acrobat Reader PDF files). And do you really believe a franchise buyer (a real one) is going to want to continue discussions with various franchisors and compare them when every one of the franchisors sent them an email bomb? After all people are frustrated enough with the 3000% increase in SPAM since the time the Federal Trade Commission decided it would look into the issue. Lots of grandstanding on the SPAM thing, lots of glorified media event cases, but the fact is the Federal Trade Commission has failed to reduce SPAM and today I got 1633 SPAMs.
One technological solution is to burn CD ROMs with disclosure documents on them, yet, they would end up in the trash too like all those AOL CD ROMS and Floppy Discs they mailed out, although one person told me that the CD ROMS make utensils, just put a pencil thru the center and use them for a pizza cutter? The fact is the way things are now you are constantly changing things so much that burning CD ROMS may save a little cost and a the trees but we have the same problems with discards.
Another technological solution was to use the web, yet many franchisors are forced to have different UFOCs based on state. Type of franchised unit and the matrix gets so complicated you have to hire a certified XML data base IT Professional, which are all busy working for government contractors right now trying to sort through the absolute mess created by the same government agencies which put the private sector in a state of disrepair. Not to mention the DHS, military and there needs. So that solution is not a short or long term solution. Registration States would like to put all this online further disseminating proprietary information to anyone coming to their websites, mostly lawyers and competitors although perhaps some students doing research, buyer here and there and an occasional International Terrorist looking for targets and ways to infiltrate infrastructure, food distribution or cause general fear.
I would like to see some progress at the Federal Trade Commission, but real progress based on reality solutions, today we see a decrease in the number of franchisors out there and that is in direct correlation to the expanding economy, yet slower job growth. I think I can feel safe to add from personal observations and economic study that the Federal Trade Commission franchising division is the reason for the slower than normal job growth during this record-breaking expansion period. It is truly in my opinion the Federal Trade Commission Franchising Divisions fault. After all franchising represents 350,000 plus outlets (business which employ real people) and the franchising sector is moving at a slower rate comparatively. It is not that the franchising model is dead, for it is by far the best business model ever created in the history of modern civilization. Clearly franchising has withstood the test of time, no the reason is that it is stifled by the Federal Trade Commission and their grandstanding to promote themselves claiming they are curbing fraud where by the Federal Trade Commission's own accounts there is literally no fraud to speak of in an industry which represents over 33% of every consumer dollar spent in America. Well then reduce regulations, disclosure and paperwork. Think about it.
"Lance Winslow" - If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/wttbbs