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FPR: The New (Amended) DealAs the Amended FTC Rule on Franchising became a reality over the past 12 months, many franchisors have tried to understand the consequences, particularly as they relate to the law on earnings claims, now called Financial Performance Representations ("FPRs"). Well Compensated?For more than a decade now, has been carefully monitoring the radar screen, gathering information on franchise lead generation and sales. No More Excuses
Show Them the MoneyWith the Amended FTC Rule mandatory as of July 1, Franchise Update asked franchisors in different industries, and of varying size and maturity, for their thoughts on the pros and cons of using Item 19 of their FDD as a sales tool. Short answer: great idea, and a real competitive edge—as long as the brand is doing well and you keep it legal. The devil, as usual, is in the details. Franchisors Can Help with FinancingIn June, FRANdata published an e-newsletter titled, "It's Time To Start Helping Franchisees To Get Loans." Darrell Johnson, the research firm's CEO, wrote: "Franchisors must increase their attention to helping franchisees obtain needed capital. Since lenders make decisions based on perceived estimates of risk, then you must help them assess your brand's franchisor and system risk." Keeping Financial Performance Claims LegalLet there be no misunderstanding: financial performance representations (formerly referred to as "earnings claims" and referred to below as "FPRs") are powerful tools in the franchise sales process. Challenge the Pros: Inside info from those in the knowHow Are You Toughing It Out In Your Industry/Category During These Lean Economic Times?
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