[Federal Register Volume 60, Number 197 (Thursday, October 12, 1995)]
[Notices]
[Pages 53186-53188]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-25295]



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FEDERAL TRADE COMMISSION

[File No. 932-3219]


Blenheim Expositions, Inc.; Consent Agreement With Analysis To 
Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Consent agreement.

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SUMMARY: In settlement of alleged violations of federal law prohibiting 
unfair acts and practices and unfair methods of competition, this 
consent agreement, accepted subject to final Commission approval, 
would, among other things, prohibit a Winter Park, Florida-based 
producer of franchise trade shows and expositions from misrepresenting 
survey results or making unsubstantiated earnings and success rate 
claims in promoting and advertising franchise shows.

DATES: Comments must be received on or before December 11, 1995.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 6th St. and Pa. Ave., NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:
Tom Cohn, Bureau of Consumer Protection, Federal Trade Commission, H-
238, 6th Street & Pennsylvania Ave., NW., Washington, DC 20580. (202) 
326-3532.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46, and Section 2.34 of 
the Commission's Rules of Practice (16 CFR 2.34), notice is hereby 
given that the following consent agreement containing a consent order 
to cease and desist, having been filed with and accepted, subject to 
final approval, by the Commission, has been placed on the public record 
for a period of sixty (60) days. Public comment is invited. Such 
comments or views will be considered by the Commission and will be 
available for inspection and copying at its principal office in 
accordance with Sec. 4.9(b)(6)(ii) of the Commission's Rules of 
Practice (16 CFR 4.9(b)(6)(ii)).

Agreement Containing Consent Order To Cease and Desist

    In the Matter of Blenheim Expositions, Inc. a corporation.

    The Federal Trade Commission having initiated an investigation of 
certain acts and practices of Blenheim Expositions, Inc., a 
corporation, and it now appearing that Blenheim Expositions, Inc., a 
corporation, hereinafter sometimes referred to as proposed respondent, 
is willing to enter into an agreement containing an order to cease and 
desist from the use of the acts and practices being investigated,
    It is hereby agreed by and between Blenheim Expositions, Inc., by 
its duly authorized officer; the attorneys for the aforementioned 
party; and counsel for the Federal Trade Commission, that:
    1. Proposed respondent Blenheim Expositions, Inc. is a corporation 
organized, existing and doing business under and by virtue of the laws 
of the State of Florida, with its office and principal place of 
business located at 1133 Louisiana Avenue, Suite 210, in the City of 
Winter Park, State of Florida.
    2. Proposed respondent admits all the jurisdictional facts set 
forth in the draft of complaint here attached.
    3. Proposed respondent waives:
    (a) Any further procedural steps;
    (b) The requirement that the Commission's decision contain a 
statement of findings of fact and conclusions of law; and
    (c) All rights to seek judicial review or otherwise to challenge or 
contest the validity of the order entered pursuant to this agreement.
    4. This agreement shall not become part of the public record of the 
proceeding unless and until it is accepted by the Commission. If this 
agreement is accepted by the Commission it, together with the draft of 
complaint contemplated thereby, will be placed on the public record for 
a period of sixty (60) days and information in respect thereto publicly 
released. The Commission thereafter may either withdraw its acceptance 
of this agreement and so notify the proposed respondent, in which event 
it will take such action as it may consider appropriate, or issue and 
serve its complaint (in such form as the circumstances may require) and 
decision, in disposition of the proceeding.
    5. This agreement is for settlement purposes only and does not 
constitute an admission by proposed respondent of facts, other than 
jurisdictional facts, or of violations of law as alleged in the draft 
of compliant here attached.
    6. This agreement contemplates that, if it is accepted by the 
Commission, and if such acceptance is not subsequently withdrawn by the 
Commission pursuant to the provisions of Sec. 2.34 of the Commission's 
Rules, the Commission may, without further notice to proposed 
respondent, (1) issue its complaint corresponding in form and substance 
with the draft of complaint here attached and its decision containing 
the following order to cease and desist in disposition of the 
proceeding and (2) make information public in respect thereto. When so 
entered, the order to cease and desist shall have the same force and 
effect and may be altered, modified or set aside in the same manner and 
within the same time provided by statute for other orders. The order 
shall become final upon service. Delivery by the U.S. Postal Service of 
the complaint and decision containing the agreed-to order to proposed 
respondent's address as stated in this agreement shall constitute 
service. Proposed respondent waives any right it may have to any other 
manner of service. The complaint may be used in construing the terms of 
the order, and no agreement, understanding, representation, or 
interpretation not contained in the order or the agreement may be used 
to vary or contradict the terms of the order.
    7. Proposed respondent has read the proposed complaint and order 
contemplated hereby. It understands that once the order has been 
issued, it will be required to file one or more compliance reports 
showing that it has fully complied with the order. Proposed respondent 
further understands that it may be liable for civil penalties in the 
amount provided by law for each violation of the order after it becomes 
final.

Order

I
    It is ordered That respondent, Blenheim Expositions, Inc., a 
corporation, its successors and assigns, and its officers; and 
respondent's agents, representatives and employees, directly or through 
any corporation, subsidiary, affiliate, division or other device, in 
connection with the advertising, promotion, or marketing of franchise 
shows in or affecting commerce, as ``commerce'' is defined in the 
Federal Trade Commission Act, do forthwith cease and desist from 
misrepresenting, in any manner, directly or by implication, the 
existence, purpose, sample, contents, validity, results, conclusions or 
interpretations of any survey, poll, test, report or study.
II
    It is further ordered That respondent, Blenheim Expositions, Inc., 
a corporation, its successors and assigns, and its officers; and 
respondent's agents, 

[[Page 53187]]
representatives and employees, directly or through any corporation, 
subsidiary, affiliate, division or other device, in connection with the 
advertising, promotion, marketing, or conducting of franchise shows in 
or affecting commerce, as ``commerce'' is defined in the Federal Trade 
Commission Act, do forthwith cease and desist from representing in any 
manner, directly or by implication:
    A. The sales, income, or profits that current or prospective 
franchise owners have earned or can or will earn; or
    B. The chances of success or success rates that franchise owners 
have enjoyed or can or will enjoy,

unless, at the time of making such representation, respondent possesses 
and relies upon competent and reliable evidence, which when appropriate 
must be competent and reliable scientific evidence, that substantiates 
the representation. For purposes of this Order, ``competent and 
reliable scientific evidence'' shall mean analyses, research, surveys, 
polls, reports, studies or other evidence based on the expertise of 
professionals in the relevant area, that have been conducted and 
evaluated in an objective manner by persons qualified to do so, using 
procedures generally accepted in the profession to yield accurate and 
reliable results.
III
    It is further ordered That respondent, Blenheim Expositions, Inc., 
a corporation, its successors and assigns, and its officers, for a 
period of five (5) years after the date of entry of this Order, shall 
distribute, at each franchise show it promotes, directly or through any 
corporation, subsidiary, affiliate, division or other device, to at 
least 500 persons attending such show, or to each person attending such 
show if the total number of such persons is fewer than 500, a brochure 
entitled, ``A Consumer Guide To Buying A Franchise,'' provided to the 
respondent by the Federal Trade Commission. The Commission shall 
provide to the respondent one camera-ready copy of the brochure, and 
the respondent is responsible for the printing, and printing costs, of 
the brochure for distribution at the franchise shows. The brochures 
distributed by respondent pursuant to this paragraph shall be 
reproduced in a format substantially similar to the original format, as 
provided by the Federal Trade Commission; provided, however, that 
reproduction in a black and white format shall be deemed substantially 
similar to the original for purposes of this paragraph. Respondent may 
revise the text of said brochure or substitute another similar document 
only after submitting said revision or substitution to staff of the 
Commission, and receiving written approval thereof.
IV
    It is further ordered That respondent, Blenheim Expositions, Inc., 
a corporation, its successors and assigns, and its officers, shall:
    A. For a period of five (5) years after the date of the last 
dissemination by or on behalf of the respondent of any representation 
covered by this Order, maintain and upon request make available to the 
Federal Trade Commission or its staff for inspection and copying:
    1. All advertisements and promotional materials setting forth such 
representation;
    2. All polls, surveys, reports, studies, or other documents and 
materials relied upon by the respondent to substantiate such 
representation; and
    3. All polls, surveys, reports, studies, or other documents and 
materials (such as correspondence) in the respondent's possession or 
control that contradict, qualify, or call into question such 
representation or the basis upon which the respondent relied for such 
representation;
    B. For a period of five (5) years after the date of their creation, 
maintain and upon request make available to the Federal Trade 
Commission or its staff for inspection and copying such other documents 
and materials as shall demonstrate full compliance with this Order.
V
    It is further ordered That, within thirty (30) days after service 
of this Order upon it, respondent, Blenheim Expositions, Inc., its 
successors and assigns shall distribute a copy of this Order to each of 
its operating divisions and to each of its officers, agents, 
representatives, or employees engaged in the preparation or placement 
of advertisements, promotional materials, or other such sales materials 
covered by this Order.
VI
    It is further ordered That respondent, Blenheim Expositions, Inc., 
its successors and assigns shall notify the Commission at least thirty 
(30) days prior to any proposed change in said corporation such as a 
dissolution, assignment, or sale resulting in the emergence of a 
successor corporation, the creation or dissolution of subsidiaries, or 
any other change in the corporation which may affect compliance 
obligations under this Order.
VII
    It is further ordered That this order will terminate twenty years 
from the date of its issuance, or twenty years from the most recent 
date that the United States or the Federal Trade Commission files a 
complaint (with or without an accompanying consent decree) in federal 
court alleging any violation of the order, whichever comes later; 
provided, however, that the filing of such a compliant will not affect 
the duration of:
    A. Any paragraph in this order that terminates in less than twenty 
years;
    B. This order's application to any respondent that is not named as 
a defendant in such compliant; and
    C. This order if such compliant is filed after the order has 
terminated pursuant to this paragraph.

Provided further, that if such complaint is dismissed or a federal 
court rules that the respondent did not violate any provision of the 
order, and the dismissal or ruling is either not appealed or upheld on 
appeal, then the order will terminate according to this paragraph as 
though the compliant was never filed, except that the order will not 
terminate between the date such complaint is filed and the later of the 
deadline for appealing such dismissal or ruling and the date such 
dismissal or ruling is upheld on appeal.
VIII
    It is further ordered That respondent, Blenheim Expositions, Inc., 
shall, within sixty (60) days after service of this Order upon it, and 
at such other times as the Commission may require, file with the 
Commission a report, in writing, setting forth in detail the manner and 
form in which it has complied with this Order.

Analysis of Proposed Consent Order to Aid Public Comment

    The Federal Trade Commission has accepted an agreement to a 
proposed consent order from Blenheim Expositions, Inc. (``Blenheim'').
    The proposed consent order has been placed on the public record for 
sixty (60) days for reception of comments by interested persons. 
Comments received during this period will become part of the public 
record. After sixty (60) days, the Commission will again review the 
agreement and the comments received and will decide whether it should 
withdraw from the agreement or make final the agreement's proposed 
order.
    This matter concerns claims made by Blenheim in its advertising and 


[[Page 53188]]
promotional materials for franchise shows.
    The Commission's complaint in this matter charges Blenheim with 
engaging in unfair or deceptive practices in connection with the 
advertising of its franchise shows. According to the complaint, 
Blenheim falsely represented that it had a reasonable basis for claims 
that franchise owners earn an average income and/or average pre-tax 
income of more than $124,000, and that franchise owners earn an average 
pre-tax income and/or average pre-tax profit of $124,290.
    The complaint also alleges that Blenheim falsely represented that 
it had a reasonable basis for claims that a prospective franchise 
owner's chances of success are 94%, and that franchise owners enjoy a 
94% success rate.
    Finally, the complaint alleges that Blenheim falsely represented 
that the above representations were proved by a Gallup poll of 
franchise owners conducted in 1991.
    The consent order contains provisions designed to remedy the 
violations charged and to prevent Blenheim from engaging in similar 
deceptive and unfair acts and practices in the future.
    Part I of the order prohibits Blenheim from misrepresenting the 
existence, purpose, sample, contents, validity, results, conclusions or 
interpretations of any survey, poll, test, report or study.
    Part II of the order prohibits Blenheim from making any claims 
about the sales, income, or profits that current or prospective 
franchise owners have earned or can or will earn, or the chances of 
success or success rates that franchise owners have enjoyed or can or 
will enjoy, unless, prior to making such claims, Blenheim has competent 
and reliable evidence to substantiate the claims, which when 
appropriate must be competent and reliable scientific evidence.
    Part III of the order requires Blenheim, for a period of five years 
after the date of entry of the order, to distribute at each franchise 
show it promotes, a brochure entitled, ``A Consumer Guide to Buying A 
Franchise,'' provided to Blenheim by the Commission. Under this 
requirement, Blenheim must reproduce the brochure in a format 
substantially similar to the original format as provided by the 
Commission; is responsible for the printing costs of the brochure; and 
must distribute copies of the brochure to at least 500 persons 
attending each such show, or to each person attending such show if the 
total number of such persons is fewer than 500. Blenheim may revise the 
text of the brochure or substitute a similar document only after 
submitting said revision or substitution to staff of the Commission and 
receiving written approval thereof.
    Part IV of the order requires Blenheim to maintain copies of all 
advertisements setting forth any representation covered by the order; 
all materials relied upon in making any representation covered by the 
order; all materials in Blenheim's possession or control that 
contradict such representation or the basis upon which Blenheim relied 
for it; and any other materials that demonstrate full compliance with 
the order.
    Part V of the order requires Blenheim to distribute copies of the 
order to each of its operating divisions and to each of its various 
officers, agents and representatives.
    Part VI of the order requires Blenheim to notify the Commission of 
any changes in corporate structure that might affect compliance with 
the order.
    Part VII of the order terminates the order twenty years from the 
date of its issuance, or twenty years from the date a complaint is 
filed in federal court alleging any violation of the order, whichever 
comes later.
    Part VIII of the order requires Blenheim to file with the 
Commission one or more reports detailing compliance with the order.
    The purpose of this analysis is to facilitate public comment on the 
proposed order, and it is not intended to constitute an official 
interpretation of the agreement and proposed order, or to modify any of 
their terms.
Donald S. Clark,
Secretary.
[FR Doc. 95-25295 Filed 10-11-95; 8:45 am]
BILLING CODE 6750-01-M