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Is it illegal for a franchisor to sell a franchise in Florida

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and take money before the...
Is it illegal for a franchisor to sell a franchise in Florida and take money before the 14 day period after receiving the Franchise Disclosure Documents has past? Are there and whistleblower laws to protect the person who report this?
Submitted: 5 years ago.Category: Business Law
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6/1/2012
Business Lawyer: kattorney, Attorney replied 5 years ago
kattorney
kattorney, Attorney
Category: Business Law
Satisfied Customers: 1,169
Experience: 16 years experience with a concentration in business, corporate and contracts law
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Kathie Russell :

Under the Franchise Rule, which is enforced by the FTC, a potential buyer must receive the document at least 14 days before being asked to sign any contract or pay any money to the franchisor or an affiliate of the franchisor. You have the right to ask for—and get—a copy of the disclosure document once the franchisor has received your application and agreed to consider it. It is generally wise to get a copy of the franchisor’s disclosure document before incurring any expenses to investigate the franchise offering.


The franchisor may give you a copy of its disclosure document on paper, via email, through a web page, or on a disc.


 

Kathie Russell :

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint, visit ftc.gov or call toll-free, 1-877--382-4357). The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

Kathie Russell :

The Federal Trade Commission (FTC) enforces the Franchise Rule. Florida also regulates franchises with state laws - franchisors are required to issue the Franchise Disclosure Document required by the FTC, 14 days prior to accepting any money or commitment from a potential franchisee. There is a required filing fee to be paid in this state.


 


 

Kathie Russell :

So you could potentially have both federal and state violations to report.

Kathie Russell :

This is from the FTC website:

Kathie Russell :

How can I file a complaint against a company?


If you are having a problem with a franchisor, consider talking with a private attorney about bringing a lawsuit, or taking other action that may help resolve the problem.


We encourage you to file your complaint with the FTC because consumer complaints help us identify companies and practices that affect a broad segment of the public, and are useful for law enforcement purposes.


You can file your complaint online using our Complaint Assistant at: https://www.ftccomplaintassistant.gov, or by telephone at 1-866-382-4357 .


We also accept complaints in writing, but please be aware that postal mail to federal agencies is subject to delays for security reasons. Please describe your problem or concern writing. Tell us what you think was misleading or deceptive in the company's promotional materials, disclosure document or offering circular. If you want your letter kept confidential, please print the words, "Privileged and Confidential," on the top of each page. Include your name, address, and a daytime telephone number where we can reach you. It will help if you can send us copies of any written claims in promotional materials or elsewhere that you believe are false. Send copies, not originals, of any documents you think we should have.


Please address your complaint to:



Consumer Response Center
Federal Trade Commission - Rm. 130
600 Pennsylvania Ave., NW
Washington, D.C. 20580.



 

Kathie Russell :

The Consumer Financial Protection Bureau (“CFPB”) oversees many of the regulations that make fraud against consumers illegal. The CFPB has responsibility to implement, examine for compliance with, and enforce “Federal consumer financial law.”

Kathie Russell :

There are whistleblower “bounty” programs created by the Dodd-Frank Wall Street Reform and Consumer Protection Act which would entitle you to a percentage of the proceeds if any penalties and fees are collected against the violating company. Also, if you are an employee, Dodd-Frank also created a very important set of whistleblower protections for employees who oppose or report violations of a number of federal consumer-protection laws. Both of these include violation of franchise laws.

Kathie Russell :

Best of luck, please let me know if you need more information.

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