Federal Trade Commission:

Enforcement of the Trade Regulation Rule on Franchising

HRD-93-83: Published: Jul 13, 1993. Publicly Released: Jul 13, 1993.

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Pursuant to a congressional request, GAO reviewed the Federal Trade Commission's (FTC) enforcement of its trade regulation rule on franchising.

GAO found that: (1) during fiscal years (FY) 1989 through 1992, FTC opened 78 franchise rule investigations, of which 18 percent resulted in judicial action, 40 percent were closed, and 42 percent were still being investigated at the end of FY 1992; (2) FTC has limited resources to devote to franchise rule enforcement; (3) some FTC franchise rule court cases take years to resolve; (4) the selective FTC approach to franchise rule enforcement means that it does not pursue some potentially worthy franchise complaints and cannot help many victims with meritorious compliants; and (5) attempts to regulate franchising through proposed federal legislation have generally been unsuccessful.

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