[Federal Register Volume 68, Number 61 (Monday, March 31, 2003)]
[Notices]
[Pages 15453-15454]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-7611]


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FEDERAL TRADE COMMISSION


Disclosure Requirements and Prohibitions Concerning Franchising 
and Business Opportunity Ventures

AGENCY: Federal Trade Commission.

ACTION: Invitation to comment on requested petition for exemption from 
Trade Regulation Rule.

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SUMMARY: The Commission solicits public comment on a petition filed by 
Rolls-Royce Corp., for an exemption from the requirements of the 
Franchise Rule.

DATES: Written comments will be accepted until May 30, 2003.

ADDRESSES: Comments may be filed in person or mailed to: Secretary, 
Federal Trade Commission, 600 Pennsylvania Avenue, NW., Washington, DC 
20580. Requests for copies of the petition and the Franchise Rule 
should be directed to the Public Reference Branch, Room 130, (202) 326-
2222.

FOR FURTHER INFORMATION CONTACT: Steven Toporoff, Attorney, Room 238, 
Federal Trade Commission, 600 Pennsylvania Avenue, NW., Washington, DC 
20580 (202) 326-3135.

SUPPLEMENTARY INFORMATION: On December 21, 1978, the Federal Trade 
Commission promulgated a trade regulation rule entitled ``Disclosure 
Requirements and Prohibitions Concerning Franchising and Business 
Opportunity Ventures'' (``the Franschise Rule'' or ``Rule''). 16 CFR 
Part 3436. In general, the Rule provides for pre-sale disclosure to 
prospective Franchisees of important information about the francisor, 
the franchise business, and the terms of the proposed Franchise 
relationship. A summary of the Rule is available from the FTC Public 
Reference Branch upon request.
    Section 18(g) of the Federal Trade Commission Act provides that any 
person or class of persons covered by a trade regulation rule may 
petition the Commission for an exemption from such rule. If the 
Commission finds that the application of such rule to any person or 
class of persons is not necessary to prevent the unfair or deceptive 
acts or practices to which the rule relates, then the Commission may 
exempt such person or class from all or any part of the rule.
    Rolls-Royce Corp. (``Rolls-Royce'' or ``Petitioner'') has filed a 
petition for an exemption from the Franchise Rule pursuant to section 
18(g) of the Federal Trade Commission Act, 15 U.S.C. 57a(g). Rolls-
Royce manufacturers turboprop, turbofan, and industrial gas turbine 
engines for sale in the defense and civilian aerospace and industrial 
markets. It also provides aftermarket support for some of its model 
engines though a combination of company-owned and independent 
authorized maintenance centers (``AMCs''). The AMCs perform repair, 
overhaul, and

[[Page 15454]]

maintenance services for customers under the Rolls-Royce trademark.
    In its petition, Roll-Royce asserts that an exemption should be 
granted because AMC purchasers are sophisticated business persons with 
extensive prior experience in the industry, and the information-
exchange and negotiation process leading to execution of an AMC 
agreement takes place over a period of several months, ensuring 
adequate time for review. Petitioner asserts that the experience and 
sophistication of prospective dealers and the company's lengthy 
selection process leading to the execution of the dealership agreement 
make the abuses identified by the Commission as the basis for the 
Franchise Rule unlikely and render application of the Rule to Rolls-
Royce unnecessary and burdensome.
    For a complete presentation of the arguments submitted by 
Petitioner, please refer to the full text of the petition, which may be 
obtained from the FTC Public Reference Branch, on request.
    In assessing the present exemption request, the Commission solicits 
comments on all relevant issues germane to the proceeding, including 
the following: (1) Is there evidence indicating that Petitioner may 
engage in unfair or deceptive acts or practices in the offer and sale 
of dealership franchises? (2) Are there other reasons that might 
militate against granting Petitioner an exemption from the Franchise 
Rule?
    The Commission has considered the arguments made by Petitioner and 
concludes that further inquiry is warranted before a decision regarding 
the petition may be made. The Commission, therefore, seeks comment on 
the exemption requested by Petitioner.
    All interested parties are hereby notified that they may submit 
written data, views, or arguments on any issues of fact, law, or policy 
that may have some bearing on the requested exemption, whether or not 
such issues have been raised by the petition or in this notice. Such 
submission may be made for sixty days to the Secretary of the 
Commission.
    Comments should be identified as ``Rolls-Royce Corp. Franchise Rule 
Exemption Comment'' and three copies should be submitted.

List of Subjects in 16 CFR Part 436

    Trade practices and Franchising.
    By direction of the Commission.

Donald S. Clark,
Secretary.
[FR Doc. 03-7611 Filed 3-28-03; 8:45 am]
BILLING CODE 6750-01-M