With only a few weeks left to respond to the Federal Trade Commission’s (FTC’s) request for public comments on certain franchising practices (the RFI), the majority of comments submitted to date have been critical of franchising. If your brand has not done so already, time is running out to provide the FTC with a more balanced view of the franchising model’s tremendous benefits.

Although the public comment process, in theory, gives equal opportunity for positive and negative responses, there is growing concern that the disgruntled minority of franchisees will drive significant change to the regulation of the model. The Government Accountability Office’s (GAO’s) recent report commissioned by the FTC in support of the RFI provides an example. That report, titled “Actions Needed to Improve Education Efforts and Awareness of Complaint Process for Franchise Owners,” begins by disclosing that of the 20 million complaints received by the FTC between 2018 and 2022, only 5,9000 (or 00.0295 percent) related to franchising. Confronted with this objectively pro-franchising statistic, the report nevertheless conjectures its conclusion—that franchisees must be underreporting complaints—from franchisee anecdotes gathered during GAO-led discussion groups.

But only a total of 44 franchisees participated in the GAO’s nine discussion groups. The largest group consisted of 14 franchisees and the smallest of two. That means the remaining seven discussion groups consisted of an average of four franchisees. In addition, six of the nine discussion groups comprised franchisees from a single brand’s franchisee association or advisory council. And those six brands represented just three industries: three limited service restaurants, two beauty salons, and one hotel/motel. The seventh discussion group also consisted of hotel/motel franchisees who belonged to an association that represents numerous brands. The remaining two franchisee discussion groups occurred at the 2022 annual meeting of the American Association of Franchisees and Dealers (“AAFD”). The AAFD had advertised three available sessions for conference attendees, but the GAO disclosed only two, which suggests that no one attended the third session. This means that the report’s conclusions rest largely on the gripes of a few dozen franchisees from six brands across three industries. Two of those industries, it bears mentioning, were disproportionately impacted by the pandemic lockdowns. To be fair, the GAO concedes that it did not “assess the prevalence of the challenges experienced by franchisees [in the franchise groups].” It further disclaims that the information gathered from the groups “is not generalizable to all franchisees’ experiences.”

In response, the report, and the limited anecdotal evidence on which it is based, should impel franchisors to provide evidence of, and give a voice to, the far more common franchising experience. The RFI is detailed, but responses do not need to address every question, and the payoff for submitting a comment is immeasurable. Absent more franchisor and franchisee comments in the coming weeks, the accounts of the disgruntled minority—amplified by the comment process—may effectuate significant, harmful change to a business model that has done so much for so many over the last 50 years.

If you would like help with drafting your response or if you are unsure on how to start, you can always reach out to us for assistance. The IFA is also hosting a virtual Franchisee Town Hall on this topic today at 3PM ET.