Eighth Circuit Vacates FTC’s “Click-to-Cancel” Rule Just Days Before It Was Set to Take Effect

Posted on July 12, 2025 by mboxerman

On July 8, 2025—just days before it was set to take effect—the Eighth Circuit Court of Appeals struck down the FTC’s widely watched “Click-to-Cancel” Rule, formally known as the Negative Option Rule. The decision stopped the rule’s implementation across the country, following a consolidated legal challenge from multiple circuits.

The Click-to-Cancel Rule was aimed at businesses that offer subscription-based services with automatic renewals—think gym memberships, streaming platforms, fitness apps, and meal delivery services. The core idea was simple: if a customer could sign up online with just a few clicks, they should be able to cancel just as easily. The rule would have required companies to provide a straightforward, online cancellation mechanism that matched the simplicity of the original sign-up process.

But the court found that the FTC skipped a key procedural requirement in the rulemaking process. Specifically, the agency failed to issue a preliminary regulatory analysis after determining that the rule’s compliance costs would exceed $100 million. That preliminary step, required by federal law, is meant to give the public a chance to weigh in on the rule’s projected economic impact and any reasonable alternatives. Instead, the FTC waited until the final rule was published to provide that analysis—too late for meaningful public input. As a result, the court vacated the rule in full.

What Happens Next?

With the rule now vacated, the FTC has a few potential paths forward:

  1. Appeal to the Supreme Court – The FTC could seek review from the U.S. Supreme Court. The agency has 90 days to file a petition for certiorari, with the possibility of an additional 60-day extension.

  2. Start Over – Alternatively, the FTC could restart the rulemaking process, this time including a proper preliminary analysis and public comment period. That would delay any new rule’s implementation for many months.

  3. Abandon the Rule – The Commission might choose to walk away from the effort entirely, particularly since two current Commissioners had previously opposed it.

What Does This Mean for Businesses?

While the Click-to-Cancel Rule is off the table for now, businesses offering subscription services—especially those with automatic renewals—shouldn’t breathe too easily. The FTC and state regulators still have tools to go after companies that make it too hard for consumers to cancel.

For instance, earlier this year, the FTC sued Uber, alleging that its cancellation process was unfair and confusing. That case was brought under the Restore Online Shoppers’ Confidence Act (ROSCA), a federal law that applies to online sales involving automatic renewals or “negative option” features. ROSCA requires companies to:

  • Clearly disclose key terms before charging a customer,

  • Get the customer’s express consent, and

  • Offer a straightforward way to cancel.

Violations of ROSCA can carry civil penalties of up to $53,088 per violation—so the risks are real.

In addition to federal rules, several states—most notably California—have their own laws requiring companies to make it easy for consumers to cancel subscription services. These laws often apply more broadly than ROSCA and can carry additional penalties.

Conclusion

While the FTC’s Click-to-Cancel Rule has been shelved for now, the underlying focus on consumer-friendly cancellation practices isn’t going away. With federal and state laws like ROSCA and California’s automatic renewal statutes still in play—and active enforcement efforts already underway—subscription-based businesses, especially those in industries like fitness, streaming, and e-commerce, should take a hard look at their cancellation policies.

Posted in Click to Cancel, Consumer, FTC | Leave a comment

Can Back-of-House Employees Participate in a Tip Pool?

Posted on June 17, 2025 by mboxerman

Understanding Traditional and Nontraditional Tip Pooling

If you operate a restaurant, you’ve likely wrestled with how to fairly compensate back-of-house staff while complying with wage and hour laws. Tip pooling and service charges can help—but each is governed by strict rules that affect your ability to use the tip credit and avoid liability.

Traditional Tip Pools: Tip Credit Means “Limited Participation”

Under the Fair Labor Standards Act (FLSA), your business may take a “tip credit,” which generally permits employers to pay front-of-house staff a reduced minimum wage and to make up the difference with tips.

If you take a tip credit, only employees who customarily and regularly receive tips may be included in a mandatory tip pool. This includes servers, bartenders, bussers, and counter staff—but excludes cooks, dishwashers, and other back-of-house staff. Employers may not retain any portion of pooled tips, nor may tips be distributed to managers or supervisors. A business that includes ineligible employees in a tip pool and takes a tip credit risks legal liability, including being held liable for back pay and penalties.

Including ineligible employees in a tip pool while taking the tip credit can expose your business to significant liability, including back pay and penalties.

Nontraditional Tip Pools: No Tip Credit But More Flexibility

If a business pays all employees the full minimum wage and does not take a tip credit, the business may include back-of-house staff and other employees who do not “customarily and regularly receive tips” in a mandatory tip pool. This means cooks, dishwashers, and other back-of-house staff can share in tips—but only if:  (1) the tips are fully redistributed (typically within the same pay period), (2) payroll records clearly identify which employees received tips and how much, and (3) as with a traditional tip pool, employers, managers, and supervisors cannot keep any portion of pooled tips.

“Service Charges” Are Not “Tips”

Some restaurants have moved away from tipping altogether and instead add a “mandatory “service charge” to guest checks. This is legal, but it’s critical to understand that service charges are not tips and are treated differently under wage and consumer protection laws.

A “tip” is a voluntary amount left by a customer for service and is considered the property of the employee. A “service charge,” by contrast (i.e., an automatic 20% added to a bill) is a mandatory fee set by the restaurant and considered business revenue.

If a service charge is distributed to employees, it must be treated as wages—subject to withholding and payroll taxes. However, since it’s not a tip, service charge distributions are not restricted by tip pooling laws and can be shared with any staff, regardless of their role.

Mandatory vs Voluntary Service Charges

Restaurant owners should distinguish between mandatory and voluntary service charges—both require clear disclosures and are not tips.

A mandatory service charge is added to the bill automatically and must be clearly disclosed to customers at the beginning of the ordering process, including on printed or digital menus. Under guidance from the Chicago Department of Business Affairs and Consumer Protection (BACP), the restaurant must also explain how the fee is used, such as to support staff wages or cover operational costs. Importantly, a mandatory service charge cannot be labeled as a “tip” or “gratuity”; doing so may mislead customers and violate consumer protection laws.

A voluntary service charge—such as a 3% “employee benefits” or “health insurance” fee that customers may ask to remove—must also be clearly disclosed. Even though customers can opt out, these charges are still revenue to the business and must not be characterized as tips..

What This Means for Operators

Here’s the bottom line:

  • If you take the tip credit, only employees who regularly receive tips may be included in a tip pool.
  • If you don’t take the tip credit, you may include back-of-house staff—but must document and distribute tips carefully.
  • If you use service charges, they’re not tips. You can distribute them freely, but they must be treated as wages and properly disclosed.

These distinctions may seem technical, but getting them wrong can lead to costly wage claims and penalties. If your compensation model is changing—or hasn’t been reviewed recently—contact the attorneys at Marcus & Boxerman to evaluate your compliance.

Posted in Employee Handbook, Employment, FLSA, Minimum Wage, Restaurant, Wages | Leave a comment

Corporate Transparency Act No Longer Requires Reporting for U.S. Companies and U.S. Persons

Posted on April 2, 2025 by mboxerman

On March 21, 2025, the Financial Crimes Enforcement Network (FinCEN) issued an interim final rule that significantly reduces reporting obligations under the Corporate Transparency Act (CTA). The rule exempts U.S. entities and U.S. individuals from filing beneficial ownership information (BOI) with FinCEN, narrowing the focus to foreign entities conducting business in the U.S. This update aligns with the U.S. Department of the Treasury’s March 2, 2025, announcement aimed at relieving small U.S. businesses from the CTA’s reporting requirements.

Under the new rule, U.S. companies are no longer required to file or update BOI with FinCEN. If a U.S. entity has already filed a report, it need not need update it unless future changes are made. This exemption significantly reduces the compliance burden for domestic businesses.

The rule now applies only to “foreign reporting companies,” which are entities formed outside the U.S. but registered to do business in U.S. states or tribal jurisdictions. Foreign entities must still file BOI reports, but they no longer must disclose information about U.S. persons who may be beneficial owners. Instead, they need only report foreign beneficial owners. Foreign entities must file their beneficial ownership reports within 30 days after (i) the rule’s publication if they were already registered to do business in the U.S. before the rule was issued or (ii) receipt of notice of their registration’s effectiveness if they are registered after the rule’s publication.

For now, domestic entities and U.S. persons need not take further action under the CTA.

FinCEN has indicated its intent to issue a final rule later this year, following a review of public comments. The comment period for the interim final rule ends on May 27, 2025. Marcus & Boxerman will keep clients informed of any developments and help navigate the evolving regulatory landscape.

Posted in Business and Corporate, Business Structures | Leave a comment

Michael Boxerman Selected to 2025 Franchise & Dealership Super Lawyers List

Posted on January 29, 2025 by mboxerman

Michael Boxerman has been selected to the 2025 Illinois Super Lawyers list for Franchise & Dealership Lawyers. Each year, no more than five percent of the lawyers in the state are selected by the research team at Super Lawyers to receive this honor. Super Lawyers is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates and peer reviews by practice area. The result is a credible, comprehensive and diverse listing of exceptional attorneys. The Super Lawyers lists are published nationwide in Super Lawyers magazines and in leading city and regional magazines and newspapers across the country.

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Nationwide Injunction Blocks Enforcement of the Corporate Transparency Act: What Business Owners Need to Know

Posted on December 4, 2024 by mboxerman

On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a preliminary injunction that halts enforcement of the Corporate Transparency Act (CTA) and its beneficial ownership information (BOI) reporting requirements. This decision, which directly impacts business owners nationwide, marks a significant development in the ongoing legal battle over the CTA.

The Court’s Ruling: A Challenge to Congressional Authority

The case, Texas Top Cop Shop, Inc., et al. v. Garland, et al., emerged from a lawsuit filed by the National Federation of Independent Business (NFIB). In its ruling, the court determined that the CTA likely oversteps Congress’s constitutional authority. Specifically, the court found that the CTA fails to regulate interstate commerce, which Congress often uses as a basis for federal laws and the law does not qualify as a “Necessary and Proper” means for Congress to exercise its constitutional power to levy taxes.

The court found the CTA is likely unconstitutional and issued an injunction to prevent its enforcement.

What Does the Injunction Mean for Business Owners?

For business owners, this injunction offers temporary relief. They no longer need to comply with the CTA’s reporting obligations, such as submitting detailed beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN) by the original January 1, 2025, deadline. During this period, federal agencies cannot enforce the CTA or impose penalties for noncompliance.

However, it is important to note that this relief is not permanent. Because the court’s decision is a preliminary injunction, the CTA’s enforcement could resume if a higher court reverses the ruling. Therefore, business owners should remain vigilant as the legal process unfolds.

Federal Response and Potential Next Steps

Although the federal government has not yet announced its next move, it is widely expected to appeal the decision. If an appeal occurs, the case will move to a higher court for further review. This could lead to a reinstatement of the CTA’s enforcement or other legal changes that affect compliance timelines.

For now, business owners should use this time to stay informed and prepare for possible outcomes. While the injunction removes the immediate obligation to comply with the CTA, the situation remains fluid. A sudden change in the legal landscape could reintroduce reporting requirements with little advance notice.

Key Takeaways

  • The court’s injunction pauses enforcement of the Corporate Transparency Act’s reporting requirements nationwide.
  • Business owners currently do not need to submit BOI reports to FinCEN or face penalties for noncompliance.
  • The legal battle over the CTA’s constitutionality continues, and enforcement could resume if a higher court overturns the injunction.
  • Staying informed and consulting legal counsel are critical as this case progresses.

By following these developments closely, business owners can better prepare for potential changes. While the court’s decision provides temporary relief, future rulings may alter compliance obligations. Remaining proactive and informed will ensure that your business is ready to adapt as new decisions emerge.

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Federal Court Blocks FTC’s Nationwide Noncompete Ban: What Employers Need to Know

Posted on November 8, 2024 by mboxerman

In a big win for employers, a Texas federal court has blocked the FTC’s proposed ban on non-compete agreements across the United States. This ruling means that employers can continue to use non-competes under state laws, at least for now. While the FTC could still challenge the ruling in a federal appeals court, there’s no immediate need to comply with the rule that was initially set to take effect on September 4. Here’s what happened, why it matters, and what steps employers should take now.

The Background on Noncompetes and the FTC Rule

The FTC proposed a nationwide ban on non-compete agreements, arguing that they limit worker freedom, suppress wages, and stifle competition. Non-competes often prevent employees from working for competitors or starting their own businesses in the same industry for a set period after leaving a job. Although intended to protect business interests, the FTC viewed these agreements as overly restrictive, especially when applied to lower-level employees with little bargaining power.

But the proposed rule didn’t make it far. A group of employers, led by a Texas company, the U.S. Chamber of Commerce, and other business organizations, filed a lawsuit in federal court to prevent the rule from taking effect. They argued that the FTC had overstepped its authority. And a Texas federal judge agreed, putting a hold on the rule in a decision issued just weeks before the ban was set to begin.

The Judge’s Ruling

Judge Ada Brown of the Northern District of Texas found the FTC’s rule was an overreach in two main ways. First, she concluded that the FTC did not have the authority to issue such a sweeping ban. Second, she called the rule “arbitrary and capricious.” She argued that the rule was too broad, trying to apply a one-size-fits-all ban across all states.

Nationwide Implications

Judge Brown’s ruling applied her order blocking the rule to all employers nationwide. Initially, her July ruling only blocked the rule for the specific parties in the Texas case, but her final ruling extended the block across the country. Other federal courts had been divided on the rule’s legality, leaving many employers uncertain about the rule’s future. But now, with this ruling, the non-compete ban is set aside nationwide, and the FTC’s plans for enforcing the ban are halted.

The Impact of the “Chevron Doctrine”

The judge’s ruling reflects a recent shift in the judicial approach to agency actions, spurred by the Supreme Court’s recent decision to limit the “Chevron doctrine.” This doctrine had previously required courts to defer to federal agencies in interpreting ambiguous statutes. But now, courts are exercising more independent judgment when evaluating agency actions. Judge Brown’s decision cited this new standard, underscoring that agencies cannot stretch their powers beyond what Congress explicitly allows.

What’s Next for Employers?

While the FTC could appeal this decision, it faces tough odds. Any appeal would go through the business friendly Fifth Circuit Court of Appeals, which is unlikely to favor the FTC’s case. And even if it reaches the Supreme Court, the current judicial climate is skeptical of expansive agency regulations.

For now, employers can continue using non-compete agreements where state laws permit. However, it’s important to make sure your non-competes comply with state-specific restrictions. Here are a few practical steps employers can take in light of this ruling:

  1. Review and Update Non-Competes: Confirm that your agreements comply with the laws of each state where you operate. Consider limiting non-competes to critical employees and adjusting agreements as needed.
  2. Ensure State-Specific Compliance: If you operate in multiple states, make sure you keep up with each state’s requirements on restrictive covenants. Illinois, for example, recently enacted novel restrictions on non-competes and non-solicitation agreements.
  3. Inventory Existing Agreements: Now’s a good time to compile a list of all active non-competes. Should the FTC’s ban make a comeback, having an organized inventory will simplify compliance adjustments if needed.
  4. Monitor the FTC’s Actions: The FTC has indicated it may still pursue non-competes through individual enforcement cases. Stay updated on developments to avoid being caught off guard by any new actions the FTC might take.

For now, employers have more flexibility in managing non-competes, but keeping these agreements narrowly focused on key employees and consistent with state laws will protect against future challenges. This ruling has restored the status quo—for now—but the ongoing legal battles mean that non-competes will likely remain an evolving issue for employers.

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How to Conduct Due Diligence Before Buying a Franchise

Posted on October 24, 2024 by mboxerman

So, you’re thinking about buying a franchise? Franchising can be a fantastic way to dive into business ownership, providing the security of an established brand and proven business model. Before you take the plunge, however, it’s crucial to do your homework and conduct thorough due diligence. This process involves researching and analyzing the franchise opportunity to ensure you know exactly what you’re getting into.

Let’s walk through the steps of due diligence to help you make an informed decision before buying a franchise.

Understand the Franchise Model

First, you need to grasp the franchise model. Start by reviewing the Franchise Disclosure Document (FDD), which contains essential information about the franchisor, including financial health, legal obligations, and fees. Don’t skim this document—read it carefully and seek legal advice to ensure you understand your rights and responsibilities as a franchisee. Along with the FDD, closely review the Franchise Agreement. This contract governs your relationship with the franchisor, detailing fees, territory rights, advertising, and renewal terms. Pay special attention to earnings claims found in Item 19 of the FDD and verify them with existing franchisees.

Research the Franchisor’s History

Next, dig into the franchisor’s history. How long have they been in business? How many franchises and company-owned locations do they operate? Examine their financial statements in the FDD to ensure they are profitable. If the franchisor is struggling financially, it could be a red flag. Also, check for any involvement in litigation or bankruptcy, as these could signal potential risks.

Speak with Current and Former Franchisees

One of the best ways to understand the franchise is by speaking with those who have firsthand experience. Talk to current franchisees about their experiences, profitability timelines, and the support they receive from the franchisor. Ask if they would invest again and what challenges they have faced. Former franchisees can provide insights into why they left, highlighting any potential issues with the franchise.

Assess the Market and Competition

Market conditions can make or break a franchise. Even a successful brand may struggle in the wrong location. Research your local market to determine if there is demand for the franchise. Study your competition to ensure your franchise will stand out. Additionally, confirm whether your contract provides territorial rights, protecting you from nearby competitors opening similar franchises.

Evaluate Costs and Financial Projections

Understanding the financial aspects of a franchise is key. Review the initial investment requirements in Item 7 of the FDD, and ensure you have a cushion for additional expenses like marketing and operational costs during the startup phase. Be aware of recurring fees such as royalties and advertising costs, which you’ll need to cover even if your profits are slim at first. Consult a financial advisor to project cash flow and set realistic profitability expectations.

Investigate the Level of Franchisor Training and Support

Support from the franchisor is a crucial benefit of buying a franchise. Investigate the level of training and ongoing support provided by the franchisor. Does the franchisor offer assistance with marketing, operations, or supply chain management? Make sure the support system is strong enough to help you succeed.

Understand Legal and Regulatory Obligations

Every business, including franchises, operates under specific legal and regulatory requirements. Before signing any agreements, familiarize yourself with local zoning laws, health regulations, and other relevant legalities. Consulting a franchise attorney is essential to ensure that there are no hidden legal issues in the FDD or Franchise Agreement.

Consider Long-Term Potential for Growth 

Consider the long-term growth potential of the franchise. Does the franchisor offer expansion opportunities? Ensure that your contract defines your territory rights clearly and assesses whether exclusivity will benefit your business.

Evaluate Renewal, Transfer, and Exit Strategy

It’s essential to have a plan for the future. Understand the renewal terms of the franchise agreement and whether they are fair. Look into the process for transferring or selling the franchise and whether the franchisor has rights that could complicate these actions. Planning your exit strategy is just as important as planning your entry into the business.

Self-Assess: Are You Ready?

Before committing, take a moment for personal and financial reflection. Do you have the skills, passion, and financial stability to run the franchise successfully? Consider your tolerance for risk, as franchising, like any business, comes with potential ups and downs.

Conclusion

Conducting due diligence is more than a task—it’s your safety net when buying a franchise. Thoroughly researching all aspects of the franchise ensures that your investment aligns with your financial goals and long-term aspirations. With careful planning and informed decision-making, franchising can be a profitable and rewarding venture.

For help in buying a franchise, contact the attorneys at Marcus & Boxerman at firm@marcusboxeman.com.

Posted in FDD, Franchise, Franchise Agreement, Franchisee, Franchisor, Franchisor & Distributor Services | Leave a comment

Michael Boxerman Selected to Franchise & Dealership Super Lawyers List

Posted on January 25, 2024 by mboxerman

Michael Boxerman has been selected to the 2024 Illinois Super Lawyers list for Franchise & Dealership Lawyers. Each year, no more than five percent of the lawyers in the state are selected by the research team at Super Lawyers to receive this honor. Super Lawyers, part of Thomson Reuters, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates and peer reviews by practice area. The result is a credible, comprehensive and diverse listing of exceptional attorneys. The Super Lawyers lists are published nationwide in Super Lawyers magazines and in leading city and regional magazines and newspapers across the country. Super Lawyers magazines also feature editorial profiles of attorneys who embody excellence in the practice of law.

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Enhancing Corporate Transparency: Corporate Transparency Act Takes Effect January 1st

Posted on December 27, 2023 by mboxerman

Financial Crimes Enforcement Network - WikipediaThe Corporate Transparency Act (CTA) becomes effective on January 1, 2024. In an effort to reduce money laundering, the CTA requires “reporting companies” to disclose information about their “beneficial owners” to the US Department of Treasury Financial Crimes Enforcement Network (FinCEN). FinCEN will maintain a national beneficial ownership registry.

A “reporting company” includes all entities formed by filing a document with a secretary of state or tribal equivalent. Nearly all entities, such as corporations and LLCs, will be considered to be a reporting company, and therefore will be required to disclose information about their beneficial owners.

Twenty-three exemptions would excuse an entity from following the CTA’s reporting requirements, including an exemption for large operating companies. To qualify for this exemption, an entity must employ more than 20 full-time, US-based employees, have an operating presence at a physical, US-based office where business is regularly conducted; and demonstrate over $5 million in gross sales or receipts on the federal income tax return filed the previous year.

CTA defines a “beneficial owner” as someone who either directly or indirectly owns or controls at least 25% of the entity or exercises substantial control over the entity. An individual exercises “substantial control” over an entity when they serve as or perform the duties of an officer (such as president, secretary, treasurer, CEO, CFO, etc.), can appoint or remove any officer, or makes important decisions for the entity.

Reporting companies report specific must report beneficial ownership information (BOI) to FinCEN, including the person’s full name, date of birth, residential address, and identification number from a passport, driver’s license, state ID, or similar form of identification. They must also disclose the name of the entity and any names under which the entity conducts business, its principal place of business, its state of formation, and its taxpayer identification number (such as an EIN). Reporting companies must also report any changes to the information shared with FinCEN within 90 days of the change.

Reporting companies formed before January 1, 2024, must file their report with FinCEN no later than January 1, 2025. Those formed between January 1, 2024, and January 1, 2025, must file their reports within 90 days of formation, and reporting companies formed after January 1, 2025, must file their reports within 30 days of formation.

Anyone who willfully violates the CTA may face civil and criminal penalties, including fines between $500 and $10,000 per day, as well as up to two years of prison time.

Businesses should take the following next steps to prepare for the CTA: determine which entities may be exempt from the reporting requirements; determine the beneficial owner(s) of each reporting company; collect the BOI that will be reported; task someone with CTA compliance; and promulgate internal policies and procedures to collect and report BOI and any changes to BOI.

Please contact Marcus & Boxerman at (312) 216-2720 or firm@marcusboxerman.com with questions about the Corporate Transparency Act or for guidance as to how these updates affect your business.

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FTC Requests Public Comment for Potential Updates to Franchise Rule

Posted on April 28, 2023 by mboxerman

The Federal Trade Commission (FTC) has recently requested public comment Federal Trade Commission - Wikipediaon how franchisors exert control over their franchisees and their franchisee’s workers. The FTC’s aims to gather information on this issue and to potentially update the its Franchise Rule. In a recent press release, the FTC highlighted the importance of franchise relationships and the need for stakeholders to provide feedback on these issues.

The FTC seeks public comment on a range of issues related to franchising, including the use of technology to monitor and control franchisees, the impact of joint employment on franchise relationships, and the adequacy of current franchise disclosure requirements. By gathering information on these issues, the FTC hopes to identify areas where improvements can be made.

According to the press release, the FTC is particularly interested in feedback on the use of technology to monitor and control franchisees–a growing issue in the franchise industry, as franchisors increasingly rely on technology to oversee their franchisees’ operations. The FTC seeks feedback on how franchisors use technology to monitor and control franchisees, and whether franchisees are given adequate notice and opportunity to object to these practices.

The FTC also seeks feedback on  joint employment issues, which has become a significant concern for franchisors. Franchisors may be held liable for the employment practices of their franchisees, and the FTC seeks on how this issue should be addressed in the Franchise Rule.

Finally, the FTC seeks feedback on the adequacy of franchise disclosure requirements. A Franchise Disclosure Document (FDD) is an important tool for protecting franchisees, as it provides franchisees with information about the risks and benefits of entering into a franchise agreement. The FTC seeks input on whether current disclosure requirements are sufficient, and whether additional disclosures should be required to ensure that franchisees are fully informed about the terms of their franchise agreement.

The FTC’s request for public comment could lead to significant changes in the franchise industry. Both franchisees and franchisors should be aware of the potential changes to the Franchise Rule, including increased disclosure requirements, changes to joint employment rules, and more detailed requirements around the use of technology.

Posted in Franchise, Franchisee, Franchisor, Franchisor & Distributor Services, Joint Employer | Leave a comment