Franchise Industry Trends in 2006

The franchise industry has taken a few hits in the last two decades. Some came from onerous regulation and poor performance by agencies like the Federal Trade Commission’s Consumer Protection Division Franchise Group, where some believe Steve Toporoff had done so much damage to the industry that he should resign in disgrace and lose your pension. Others, however, applauded this gentleman’s efforts to work with industry and lawyers to develop laws that would keep the FTC in a position of arbitrator. Personally, I think the first view is more appropriate and I realize in hindsight that the damage the FTC did under his leadership in the FTC Franchise Group led to the failure of some 4,000 franchise businesses between 1985 and 2001.

The Federal Trade Commission has now not prosecuted or attempted to prosecute a franchise case since 2000 that I am aware of after messing up a few and accusing a company of things it didn’t do. Fortunately, the franchise industry imposes itself simply by its nature. That is, if a franchisor fails to produce successful franchisees, he will fail due to non-payment of royalties from franchisees who are unprofitable or out of business.

In addition, the litigious nature of franchising has caused premature failure and there are simply so few franchises that enforcing the law is quite easy with a simple phone call or consultation from a franchise law firm to the company on behalf of the franchisee that has a dissatisfied or good faith attitude. lament. We need to fire all those in government regulatory agencies, who destroy or diminish entire sectors of our economy without regard to the realities of free markets. Furthermore, for such crimes against free enterprise, we need to establish prison sentences for these bureaucrats. So think about this in 2006.