Regulators Intentionally Asleep At The Switch

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The FTC Rule was promulgated in late 1979 to regulate the disclosure process in the sale of retail franchises to the general public and is a prime example of regulatory capture by all of the special interests who benefit from the franchising business model.
Although franchisee advocates have pointed out the serious flaw in the regulation of the sale of franchises to the public (the flaw for the franchisee) the FTC remains deaf, dumb, and blind and prospective buyers of franchises are not provided material risk factors concerning unit performance before they sign the unilateral and adhesory franchise agreements.
Read Franchise Fraud, Churning, Regulation in a Google Search for further comments.

Carol Cross of MO 5:53PM February 05, 2010

If you have any doubts about this subject I would suggest reading RAILROADS TRIUMPHANT by Albro Martin. The Interstate Commere Commission was NOT captured by the industry. It was captured by agrarian interests because of the wide-spread belief that railroad rates were unfair. The I.C.C. was so dominaed by shipper interests that Prsident Taft tried to interpose a "Commerce Court" to deal with the inequities. Unfortunately, the Commerce Court was short-lived mainly due to the progressive movement which elected Wilson. It didn't help matters when a Commerce Court justice was impeached.
If you take the time to go through the voluminous history of the ICC decisions you will find that the shippers were always the winners. Today, deregulation under the "Staggers Act" has provided a somewhat level "playing field", but the same forces are still in play. Most of railroad critics have no conception of the cost of rail transportation, either in cost of fixed-plant or operating costs. I sometimes wonder if the I.C.C. should be ressurected.

John Marshall of OR 10:07PM June 24, 2009