[Federal Register Volume 62, Number 102 (Wednesday, May 28, 1997)]
[Proposed Rules]
[Pages 28822-28824]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-13870]


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FEDERAL TRADE COMMISSION

16 CFR Part 436


Franchise Rule Public Workshop Conferences

AGENCY: Federal Trade Commission.

ACTION: Public workshop conferences.

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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') will 
hold six public workshop conferences in connection with the Advance 
Notice of Proposed Rulemaking (``ANPR'') on the Trade Regulation Rule 
entitled ``Disclosure Requirements and Prohibitions Concerning 
Franchising and Business Opportunity Ventures,'' 16 CFR Part 436 (the 
``Franchise Rule'' and ``Rule''). In addition, the Commission will 
continue to accept comments on the ANPR until December 31, 1997.

DATES: The public workshop conferences will be held as follows:

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       Conf. No.                  Topics                        Location                         Dates          
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1.....................  Trade Show Promoters......  Washington, DC..................  July 28, 29.              
2.....................  Business Opportunities....  Chicago, IL.....................  Aug. 21, 22.              
3.....................  UFOC, Internet,             New York, NY....................  Sept. 18, 19.             
                         International Co-                                                                      
                         Branding, Alternative Law                                                              
                         Enforcement.                                                                           
4.....................  Business Opportunities....  Dallas, TX......................  Oct. 20, 21.              
5.....................  UFOC, Internet,             Seattle, WA.....................  Nov. 6, 7.                
                         International, Co-                                                                     
                         Branding, Alternative Law                                                              
                         Enforcement.                                                                           
6.....................  Business Opportunities....  Washington, DC..................  Nov. 20, 21.              
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[[Page 28823]]

The first day of each conference will run from 9 a.m. until 5 p.m., and 
the second day will run from 9 a.m. until 3 p.m. The first day of each 
conference will consist of a roundtable discussion on the various 
issues described below. Members of the public will also have the 
opportunity to comment on the issues raised during the roundtable 
discussions. The second day will be reserved for members of the general 
public who wish to make statements for the record on any of the topics 
raised by the ANPR.

ADDRESSES: Parties interested in participating in one or more of the 
Public Workshop Conferences should submit a request to participate on 
or before July 1, 1997, to Myra Howard, Division of Marketing 
Practices, Federal Trade Commission, Washington, DC 20580. The 
Commission will also accept requests to participate received at the 
following E-mail address: ``[email protected]'', and at the Commission's 
ANPR hotline telephone number: (202) 326-3573.

FOR FURTHER INFORMATION CONTACT:
Steven Toporoff, (202) 326-3135, or Myra Howard, (202) 326-2047, 
Division of Marketing Practices, Bureau of Consumer Protection, Federal 
Trade Commission, 6th Street and Pennsylvania Avenue, NW., Washington, 
DC. 20580.

SUPPLEMENTARY INFORMATION:

Part A--Overview of the Commission's ANPR
    On February 28, 1997, the Commission published an ANPR announcing 
the Commission's proposal to commence a rulemaking proceeding to amend 
the Franchise Rule. 62 FR 9115 (February 28, 1997). The ANPR requested 
comment on whether the Franchise Rule should be amended to: (1) Revise 
the Rule's disclosure requirements based upon the Uniform Franchise 
Offering Circular Guidelines (``UFOC'') model; (2) distinguish between 
disclosures for business opportunities and for franchises; (3) exempt 
trade show promoters from liability as ``brokers; '' (4) require trade 
show exhibitors to have their disclosure documents available for public 
inspection; (5) require franchisors to inform prospective franchisees 
that franchisors are permitted to disclose earnings information, and 
where franchisors elect not to do so, to require such franchisors to 
state that they make no earnings representations and do not authorize 
their salespersons to make them; (6) clarify that the Rules does not 
apply to the sale of franchises to be located outside the United 
States; (7) clarify the applicability of the Rule to the sale of 
franchises over the Internet; and (8) clarify the applicability of the 
Rule to the sale of co-branded franchise systems. In addition, the ANPR 
asked whether the Commission should develop a program to reduce or 
waive civil penalties for certain violations of the Franchise Rule.
Part B--Extension of Comment Period
    The ANPR stated that comments must be submitted on or before April 
30, 1997. The Commission is now extending the comment period until 
after the final public workshop conference is held, as set forth below, 
in order to provide the public with maximum opportunity to participate 
in the rulemaking process. Therefore, submissions of views, drafts of 
proposed amendments to the Rule, and any other written, oral, or visual 
materials will be accepted throughout the conference period, and up 
until December 31, 1997. All such comments will also be made part of 
the public record.
Part C--Overview of the Public Workshop Conferences
    The ANPR announced that Commission staff would hold several public 
workshop conferences. These conferences are intended to serve several 
purposes: (1) To allow Commission staff and interested parties the 
opportunity to discuss openly issues raised in the ANPR and in the 
comments to the ANPR; (2) to offer the general public an opportunity to 
make statements on the record concerning the issues raised in the ANPR; 
and (3) to assist Commission staff in drafting a proposed amended rule.
    Accordingly, the first day of each public workshop conference will 
consist of a roundtable discussion centered on a specific topic or 
topics, as noted below. In addition to discussing and analyzing the 
issues, the participants will be asked to offer concrete suggestions on 
revising the Rule in those specific areas. Participation by the general 
public the first day will be limited to a discussion of the topics 
raised that day. The second day of each conference will be reserved for 
the general public to share their comments and concerns about any of 
the issues raised in the ANPR. Statements by members of the general 
public may be limited to a few minutes, depending on the number of 
persons who wish to make statements. All discussions and comments will 
be transcribed and placed on the public record.
    The Commission staff will select a limited number of parties to 
join in the roundtable discussions. To the extent possible, Commission 
staff will select parties to represent the following affected 
interests: franchisors; franchisees; business opportunity promoters; 
business opportunity purchasers; franchise and business opportunity 
trade show organizers; franchise and business opportunity brokers; 
franchisor, franchise, business opportunity, and other trade or 
industry associations; franchise consultants; economists and 
academicians; Federal, State and local law enforcement and regulatory 
authorities; and any other interests that Commission staff may identify 
and deem appropriate for representation.
    Parties representing the above-referenced interests will be 
selected on the basis of the following criteria:
    1. The party must submit a comment. First priority will be given to 
those parties who submit their comment by July 1, 1997. After that 
date, parties may be considered as participants on a space-available 
basis.
    2. The party must also notify Commission staff in writing, via E-
mail, or via the hotline number, of its interest in being a roundtable 
participant and, if required, authorization to represent an affected 
interest, on or before July 1, 1997. The party must also identify which 
conference or conferences that party wishes to attend. Those parties 
submitting their requests after July 1, 1997, will also be considered 
on a space-available basis.
    3. The party's participation would promote a balance of interests 
represented at the conference.
    4. The party's participation would promote the consideration and 
discussion of the topics being discussed at the conference.
    5. The party has experience or expertise in activities affected by 
the Franchise Rule.
    6. The party adequately reflects the views of the affected 
interest(s).
    7. The number of parties selected will not be so large as to 
inhibit effective discussion among them.
    The Commission strongly encourages all interested parties to 
participate in the public workshop conferences, as the transcripts from 
the conferences will be an important part of the public record in this 
rulemaking proceeding. Individuals wishing to make statements on the 
record the second day of any conference need not submit a request to 
participate, and the Commission will make every effort to provide time 
for all members of the general public to make statements regarding any 
of the ANPR issues. Each conference will be facilitated by a Commission 
staff member. Prior to each conference,

[[Page 28824]]

participants will be provided with tentative agendas as well as copies 
of the comments submitted in response to the ANPR.
Part D--Schedule of Public Workshop Conferences
    The first public workshop will be held on July 28 and 29, 1997, at 
the Federal Trade Commission, Room 432, 6th Street and Pennsylvania 
Avenue, NW., Washington, DC 20580. The roundtable discussion on July 
28, 1997, will focus on the possible exemption of trade show promoters 
from the Rule's disclosure requirements and the development of possible 
voluntary industry standards.
    The second public workshop conference will be held on August 21 and 
22, 1997, at the Chicago Regional Office, Federal Trade Commission, 55 
E. Monroe Street, Suite 1860, Chicago, Illinois 60603. The roundtable 
discussion on August 21, 1997, will focus on revisions to the business 
opportunity section of the Rule, including a definition of the term 
``business opportunity.''
    The third public workshop conference will be held on September 18 
and 19, 1997, at the Jacob Javits Federal Building, 26 Federal Plaza, 
Floor 36, Conference Room 3604, New York, NY 10278. The roundtable 
discussion on September 18, 1997, will focus on whether the Commission 
should revise the Rule based upon the UFOC model and possible 
modifications; the sale of franchises through the Internet; the sale of 
co-branded franchise systems; and alternative approaches to Franchise 
Rule law enforcement.
    The fourth public workshop conference will be held on October 20 
and 21, 1997, at the Dallas Regional Office, Federal Trade Commission, 
1999 Bryan Street, Suite 2150, Dallas, Texas 75201. The roundtable 
discussion on October 20, 1997, will focus on proposals for a revised 
definition of the term ``business opportunity,'' and specific proposed 
disclosure requirements for business opportunity sellers.
    The fifth public workshop conference will be held on November 6 and 
7, 1997, at the Seattle Regional Office, Federal Trade Commission, 915 
Second Avenue, Suite 2886, Seattle, Washington 98174. The roundtable 
discussion on November 6, 1997, will focus on whether the Commission 
should revise the Rule based upon the UFOC model and possible 
modifications; the sale of franchises through the Internet; the sale of 
co-branded franchise systems; and alternative approaches to Franchise 
Rule law enforcement.
    The final public workshop conference will be held on November 20 
and 21, 1997, at the Federal Trade Commission, Room 432, 6th Street and 
Pennsylvania Avenue, NW., Washington, DC 20580. The roundtable 
discussion on November 20, 1997, will focus on drafting revised 
business opportunity disclosures.

List of Subjects in 16 CFR Part 436

    Advertising, Business and industry, Franchising, Trade practices.

    Authority: 15 U.S.C. 41-58.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 97-13870 Filed 5-27-97; 8:45 am]
BILLING CODE 6750-01-M