Federal Fair Franchise Practices Act

Summary

Federal Fair Franchise Practices Act - Prohibits any person, partnership, or corporation, in connection with the advertising, offering, licensing, contracting, sale, or other promotion of any franchise, or any relationship which is represented to be a franchise, from: (1) employing a device, scheme, or artifice to defraud; (2) engaging in an act, practice, course of business, or pattern of conduct which operates as a fraud or deceit upon any person; (3) obtaining money or property, or assisting others in so doing, by means of an untrue statement of a material fact or any omissions of a fact necessary to make a statement not misleading; (4) discriminating among prospective franchisees on the basis of race, color, sex, religion, disability, or national origin; or (5) representing or implying that a franchise has been reviewed, endorsed, recommended, or approved by the United States or an officer or agency thereof. Prohibits any misrepresentations: (1) in required disclosures in connection with a franchise or its offering; and (2) of franchise earnings and failures (with the burden of proof on the franchisor). (Sec. 4) Prohibits any franchisor or subfranchisor, in connection with the operation of a franchise system or the performance, enforcement, renewal and termination of any franchise agreement, from: (1) engaging in an act, practice, course of business, or pattern of conduct which operates as a fraud or deceit upon any person; (2) employing unlawful or deceptive acts or practices in the operation of the franchisor's enterprise or method of business; or (3) discriminating among franchisees on the basis of race, sex, religion, disability, or national origin. Prohibits such entities from: (1) terminating or cancelling a franchise prior to its expiration without good cause; (2) prohibiting a franchisee from obtaining equipment, fixtures, supplies, or services used in the business from sources of the franchisee's choosing, with exceptions; and (3) prohibiting a franchisee from engaging in any business at any location after the expiration (or termination for good cause) of a franchise. (Sec. 5) Sets forth provisions concerning: (1) minimum standards of conduct (good faith, due care, and limited fiduciary duty) for each party to a franchise agreement; (2) assumption of prior franchise obligations by the acquiring party; (3) a prohibition against a franchisor establishing the same or very similar franchise as that offered by a franchisee in unreasonable proximity to the franchisee's business (including liability for damages in such cases and exceptions to such liability); (4) a prohibition against requiring the inclusion of a franchise agreement term or condition which violates this Act or relieves a person from a duty or liability under this Act; (5) a prohibition against the waiver from compliance with this Act; (6) legal actions brought by persons injured or damaged by violations; (7) the right to arbitration or mediation in lieu of a legal action; (8) authorized legal actions by State attorneys general on behalf of State residents for alleged violations; and (9) the obligation to comply with all applicable State franchising laws to the extent not inconsistent with this Act. (Sec. 13) Directs the Bureau of Census of the Department of Commerce to include in its business census for 1997 and thereafter statistical information on the number, ownership, and operation of franchise businesses. Requires Bureau: (1) consultation with the Federal Trade Commission, the Congress, and other interested organizations; and (2) reporting to the Congress of the most effective and accurate means of gathering and presenting the required statistical information.

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Timeline

1. 25 May 1995

   Introduced

   Referred to the House Committee on the Judiciary.

   Source: IntroReferral

2. 25 May 1995

   Introduced

   Introduced in House

   Source: IntroReferral

3. 25 May 1995

   Introduced

   Introduced in House

   Source: IntroReferral

4. 26 May 1995

   Introduced

   Sponsor introductory remarks on measure. (CR E1146-1147)

   Source: IntroReferral

Votes

No vote records are attached yet.

Versions

• Introduced in House · 25 May 1995 · Official file

Documents

3 official files

• Introduced in House (text)

  Introduced in House · EN · 25 May 1995

  ViewDownloadOpen at official source

• Introduced in House (PDF)

  Introduced in House · EN · 25 May 1995

  ViewDownloadOpen at official source

• Introduced in House

  summary · EN · 25 May 1995

  Open at official source

Sponsors

• Rep. LaFalce, John J. [D-NY-36] · D · Sponsor
• · hsju00 · Standing

Related records

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