AHLA Submits Comments To FTC on Franchise Rule

On Monday, the American Hotel & Lodging Association (AHLA) filed comments in response to a Franchise Rule Regulatory Review published in the Federal Register. Brian Crawford, AHLA Executive Vice President of Government Affairs, submitted a letter to Acting Secretary of the Federal Trade Commission April J. Tabor outlining AHLA’s position, writing that, ultimately, while some minor improvements could be made to the Franchise Disclosure Document, AHLA and its members believe that the Franchise Rule is sufficient in its current form.

“Franchising in the hotel industry dates back nearly 80 years. The franchise system allows hotels to commit to a level of excellence from location to location and share best practices to deliver a superior product,” wrote Crawford. “Franchisees and franchisors have clearly defined roles and responsibilities which provides tremendous value to the nearly 60 percent of hotels that operate as a small business. Currently, 53 percent of all hotels in the U.S. are franchised and provide stability and certainty to hoteliers and guests alike.”

Crawford continued, “The Franchise Rule makes it an unfair or deceptive act or practice for franchisors to fail to give prospective franchisees a Franchise Disclosure Document providing specified information about the franchisor, the franchise business, and the terms of the franchise agreement. The Franchise Rule also prohibits related misrepresentations by franchise sellers. The FTC seeks comment ‘on the efficiency, costs, benefits, and regulatory impact of the [Franchise] Rule as part of its systematic review of all current Commission regulations and guides.'”

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Ultimately, Crawford wrote that while some minor adjustments could be made to improve the Franchise Disclosure Document, AHLA and its members believe that the Franchise Rule is sufficient in its current form. “Overall, AHLA and its members, both franchisors and franchisees, are satisfied with the Franchise Rule and the Franchise Disclosure Document in their current form and believe they adequately protect franchisees from unfair practices or misrepresentations by franchisors,” Crawford wrote.

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