FTC Extends Comment Period for Request for Information Related to Franchise Agreements and Business Practices Until June 8

Federal Trade Commission (FTC)

The Federal Trade Commission recently extended the deadline for members of the public to comment in response to its Request for Information on franchise agreements and franchisor business practices, including how franchisors may exert control over franchisees and their workers.

At the request of several interested parties, the Commission extended the original May 9, 2023 public comment period for 30 days, until June 8, 2023. Information on how to submit comments can be found online at regulations.gov.

The FTC announced the Request for Information on March 10. The agency would like to know more about how franchisors may exert control over franchisees and their workers. In particular, the agency is interested in how franchisors disclose certain aspects and contractual terms of the franchise relationship, as well as the scope, application, and effect of those aspects and contractual terms.

Separately, the FTC is seeking public comment on a proposed rule to ban noncompete clauses for workers in some situations. As part of that proposed rulemaking, the FTC is interested in public comments on the question of whether that proposed rule should also apply to noncompete clauses between franchisors and franchisees. Comments related to the use of noncompete restrictions in franchise agreements should be submitted as part of the noncompete rulemaking through April 19, 2023. This request is separate from the noncompete rulemaking proceeding. Similarly, this Request for Information is separate from the Franchise Rule regulatory review. Comments submitted in response to this request will not automatically become part of either the noncompete rulemaking proceeding or the Franchise Rule regulatory review record.

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The lead staff attorneys on this matter are Christine M. Todaro and Josh Doan from the FTC’s Bureau of Consumer Protection and Alex Petros from the FTC’s Office of Policy Planning.

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