» Autor: Lance Winslow

Many practitioners of business opportunities, which sell small business models to consumers, are excited to see that they will soon have a separate category of law, rules and regulations at the Federal Trade Commission. Most all Franchisors, those who sell franchises are also ecstatic over the move and say it is about time.

Here is an excerpt from the Federal Trade Commission’s report of all the commenters on this proposed rule change and separation of the two business models;

“Based upon its enforcement experience and the record developed to date, the Commission has determined to promulgate a separate trade regulation rule to address widespread fraud in the sale of business opportunities. This approach is consistent with the view of the vast majority of commenters and the regulatory approaches adopted in most states.”

“Further, unlike most franchises, many business opportunities are permeated with fraud. Perhaps one business opportunity and franchise consultant said it best when she described many business opportunity sellers as:

Individuals who go from one business opportunity to the next, violating laws, committing frauds, taking funds without delivering what was promised only to shut down the operation within a year and move on to another one with new officers, new company names, and new products.”

Now some Franchisor founders are saying; “what on Earth took the FTC so long to figure this out?” after all they have been told this for years? It really is about time. What will this mean for Biz Ops? Simpler rules and regulations from the FTC and easier to understand disclosures for customers and for Franchisors it puts up a barrier, which prevents the mixing of laws between the two very different business models. Consider all this in 2006.

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