Franchise Termination

The secret use of Gag orders in franchise termination

Franchise termination

 What is striking is the Federal Trade Commission knows about the use of gag orders and non-disclosure “agreements” Franchise Rip offs and franchise scams that lead to Franchise Misrepresentation.

Federal Register, Vol. 72, No. 61/Friday, March 30, 2007/Rules and Regulations http://www.setonresourcecenter.com/register/2007/Mar/30/15444A.pdf  

These pages in the FTC The Franchise Rule specifically discuss Franchise Misrepresentation about contractual terms in franchising

Confidentiality clause, page 15505 “ a Scorecard Plus franchisee, related: ‘‘I had spoken to some of the franchisees that had left the system. I now feel certain that they painted a picture that was not close to being the truth based on the gag order that [the franchisor] imposed. Had I gotten the truth from these people, my decision certainly would have been different. Every franchisee leaving the system has had a gag order placed on them, making it impossible for current and future franchisees to get the facts.’’

The following franchisee was getting a divorce due to a Franchise Rip off. Do you want to have franchise scams help you get a divorce?

The franchisee stated: ‘‘I am at this point not going to state the franchise because I am on my way at 1:00 to sign the final divorce papers, as such, the papers that separate us legally. There’s a gag order there. So, if you are planning on putting this on the Internet, that could be a problem. . . [T]he gag order . . . prohibits me from being able to answer questions, you know, and give cautionary remarks to other people who might be considering the franchise that I was with.’’

For example, Susan Kezios of the AFA stated that ‘‘the use of gag orders is almost 100 percent in some franchise systems.’’ Kezios, ANPR, 6 Nov. 97 Tr., at 241.

Page 15455 states “the Commission has rejected suggestions to limit the definition of confidentiality clause to cover only broad clauses that prohibit all communications by current or former franchisees83 or only circumstances where all or at least 20% of franchisees are under speech restrictions.84

If you are a veteran about to invest in a franchise, your self-directed 401K, life savings, sba veterans loan or second mortgage on your house, wouldn’t you like to talk to those 20% franchisees that are under a “gag order” not to talk to you about their Franchise scam experience with Franchise Misrepresentation?