Agency Information Collection Activities; Submission for OMB Review; Comment Request; Extension, 60696-60698 [E8-24232]

Download as PDF 60696 Federal Register / Vol. 73, No. 199 / Tuesday, October 14, 2008 / Notices Item No. Bureau Subject 1 Media .............................................................. 2 Public Safety & Homeland Security ............... 3 Wireless Tele-Communications ..................... 4 Wireless Tele-Communications ..................... 5 Wireless Tele-Communications ..................... 6 International .................................................... 7 International .................................................... Title: Amendment of Parts 73 and 74 of the Commission’s Rules to Establish Rules for Digital Low Power Television, Television Translator, and Television Booster Stations and to Amend Rules for Digital Class A Television Stations. Summary: The Commission will consider an Order, Further Notice of Proposed Rulemaking, and Memorandum Opinion and Order considering issues with respect to the low power television digital transition. Title: Improving Public Safety Communications in the 800 MHz Band; Relinquishment By Sprint Nextel of Channels in the Interleaved, Expansion, and Guard Bands. Summary: The Commission will consider an Order addressing Sprint Nextel’s June 17, 2008 Petition for Relief regarding its 800 MHz spectrum holdings in the Interleaved Band (809–815/854–860 MHz), Expansion Band (815–816/860–861 MHz) and Guard Band (816–187/861–862 MHz). Title: Promoting Efficient Use of Spectrum Through Elimination of Barriers to the Development of Secondary Markets (WT Docket No. 00–230). Summary: The Commission will consider a Second Order on Reconsideration concerning the Secondary Markets proceeding. Title: Amendment of Part 90 of the Commission’s Rules To Provide for Flexible Use of the 896–901 MHz and 935–940 MHz Band Allotted to the Business and Industrial Land Transportation Pool. Summary: The Commission will consider a Report and Order whether to adopt geographic service licensing and competitive bidding rules for spectrum presently unencumbered within the spectrum currently allotted at 900 MHz for Business/Industrial Land Transportation (B/ILT) use. The Commission will also consider appropriate interference protection standards and whether the Commission should lift the ‘‘freeze’’ placed on applications for new 900 MHz B/ILT authorizations. Title: EFL Realty Trust, Applications for New Licenses In the Non-SMR 900 MHz Band for Industrial/Business Pool, Trunked (YU) Stations at Multiple Locations. Summary: The Commission will consider an Order addressing the dismissal of thirteen applications filed by EFL Realty Trust, proposing non-Specialized Mobile Radio trunked service in the Industrial/Business Pool 900 MHz band. Title: 2000 Biennial Regulatory Review—Streamlining and Other Revisions of Part 25 of the Commission’s Rules Governing the Licensing of, and Spectrum Usage by, Satellite Network Earth Stations and Space Stations. Streamlining the Commission’s Rules and Regulations for Satellite Applications and Licensing Procedures. Summary: The Commission will consider an Eighth Report and Order and Order On Reconsideration concerning issues raised in the Third Further Notice of Proposed Rulemaking in this proceeding, IB Docket No. 00–248. Title: Second Annual Report and Analysis of Competitive Market Conditions with Respect to Domestic and International Satellite Communications Services Summary: The Commission will consider a Second Annual Report to the United States Congress on the status of competition in the markets for domestic and international satellite communications services, as required by Section 703 of the Communications Satellite Act of 1962, as amended. jlentini on PROD1PC65 with NOTICES *The summaries listed in this notice are intended for the use of the public attending open Commission meetings. Information not summarized may also be considered at such meetings. Consequently these summaries should not be interpreted to limit the Commission’s authority to consider any relevant information. Open captioning will be provided for this event. Other reasonable accommodations for people with disabilities are available upon request. Include a description of the accommodation you will need including as much detail as you can. Also include a way we can contact you if we need more information. Make your request as early as possible; please allow at least 5 days advance notice. Last minute requests will be accepted, but may be impossible to fill. Send an e-mail to: fcc504@fcc.gov or call the Consumer & Governmental Affairs Bureau at 202– 418–0530 (voice), 202–418–0432 (tty). For a fee this meeting can be viewed live over George Mason University’s Capitol Connection. The Capitol Connection also will carry the meeting live via the Internet. To purchase these VerDate Aug<31>2005 16:37 Oct 10, 2008 Jkt 217001 services, call (703) 993–3100 or go to https://www.capitolconnection.gmu.edu. Copies of materials adopted at this meeting can be purchased from the FCC’s duplicating contractor, Best Copy and Printing, Inc. (202) 488–5300; Fax (202) 488–5563; TTY (202) 488–5562. These copies are available in paper format and alternative media, including large print/type; digital disk; and audio and video tape. Best Copy and Printing, Inc. may be reached by e-mail at FCC@BCPIWEB.com. Additional information concerning this meeting may be obtained from Audrey Spivack or David Fiske, Office of Media Relations, (202) 418–0500; TTY 1–888–835–5322. Audio/Video coverage of the meeting will be broadcast live with open captioning over the Internet from the FCC’s Audio/ PO 00000 Frm 00025 Fmt 4703 Sfmt 4703 Video Events Web page at https:// www.fcc.gov/realaudio. Federal Communications Commission. Marlene H. Dortch, Secretary. [FR Doc. E8–24412 Filed 10–9–08; 4:15 pm] BILLING CODE 6712–01–P FEDERAL TRADE COMMISSION Agency Information Collection Activities; Submission for OMB Review; Comment Request; Extension Federal Trade Commission (‘‘Commission’’ or ‘‘FTC’’). ACTION: Notice. AGENCY: SUMMARY: The information collection requirements described below will be E:\FR\FM\14OCN1.SGM 14OCN1 Federal Register / Vol. 73, No. 199 / Tuesday, October 14, 2008 / Notices jlentini on PROD1PC65 with NOTICES submitted to the Office of Management and Budget (‘‘OMB’’) for review, as required by the Paperwork Reduction Act (‘‘PRA’’). The FTC is seeking public comments on its proposal to extend through October 31, 2011, the current PRA clearance for information collection requirements contained in its Trade Regulation Rule on Disclosure Requirements and Prohibitions Concerning Franchising (‘‘Franchise Rule’’). That clearance expires on October 31, 2008. DATES: Comments must be submitted on or before November 13, 2008. ADDRESSES: Interested parties are invited to submit written comments electronically or in paper form. Comments should refer to ‘‘Franchise Rule, PRA Comment, FTC File No. P094400’’ to facilitate the organization of comments. Please note that comments will be placed on the public record of this proceeding—including on the publicly accessible FTC website, at (https://www.ftc.gov/os/ publiccomments.shtm)—and therefore should not include any sensitive or confidential information. In particular, comments should not include any sensitive personal information, such as an individual’s Social Security Number; date of birth; driver’s license number or other state identification number, or foreign country equivalent; passport number; financial account number; or credit or debit card number. Comments also should not include any sensitive health information, such as medical records or other individually identifiable health information. In addition, comments should not include any ‘‘[t]rade secrets and commercial or financial information obtained from a person and privileged or confidential. . . .,’’ as provided in Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and Commission Rule 4.10(a)(2), 16 CFR 4.10(a)(2). Comments containing material for which confidential treatment is requested must be filed in paper form, must be clearly labeled ‘‘Confidential,’’ and must comply with FTC Rule 4.9(c).1 Because paper mail addressed to the FTC is subject to delay due to heightened security screening, please consider submitting your comments in electronic form. Comments filed in electronic form should be submitted by 1 FTC Rule 4.2(d), 16 CFR 4.2(d). The comment must be accompanied by an explicit request for confidential treatment, including the factual and legal basis for the request, and must identify the specific portions of the comment to be withheld from the public record. The request will be granted or denied by the Commission’s General Counsel, consistent with applicable law and the public interest. See FTC Rule 4.9(c), 16 CFR 4.9(c). VerDate Aug<31>2005 15:37 Oct 10, 2008 Jkt 217001 using the following weblink: (https:// secure.commentworks.com/ftcfranchiserule) (and following the instructions on the web-based form). To ensure that the Commission considers an electronic comment, you must file it on the web-based form at the weblink (https://secure.commentworks.com/ftcfranchiserule). If this Notice appears at (https://www.regulations.gov/search/ index.jsp), you may also file an electronic comment through that website. The Commission will consider all comments that regulations.gov forwards to it. You may also visit the FTC website at https://www.ftc.govto read the Notice and the news release describing it. A comment filed in paper form should include the ‘‘Franchise Rule, PRA Comment, FTC File No. P094400’’ reference both in the text and on the envelope, and should be mailed or delivered to the following address: Federal Trade Commission, Office of the Secretary, Room H-135 (Annex J), 600 Pennsylvania Avenue, NW, Washington, DC 20580. The FTC is requesting that any comment filed in paper form be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions. All comments should additionally be submitted to: Office of Information and Regulatory Affairs of OMB, Attention: Desk Officer for the Federal Trade Commission. Comments should be submitted via facsimile to (202) 3956974 because U.S. Postal Mail is subject to lengthy delays due to heightened security precautions. The FTC Act and other laws the Commission administers permit the collection of public comments to consider and use in this proceeding as appropriate. The Commission will consider all timely and responsive public comments that it receives, whether filed in paper or electronic form. Comments received will be available to the public on the FTC website, to the extent practicable, at (https://www.ftc.gov/os/ publiccomments.shtm). As a matter of discretion, the Commission makes every effort to remove home contact information for individuals from the public comments it receives before placing those comments on the FTC website. More information, including routine uses permitted by the Privacy Act, may be found in the FTC’s privacy policy, at (https://www.ftc.gov/ftc/ privacy.shtm). copies of the proposed information requirements for the Franchise Rule should be addressed to Craig Tregillus, Staff Attorney, Division of Marketing Practices, Bureau of Consumer Protection, Federal Trade Commission, Room H-238, 600 Pennsylvania Ave., N.W., Washington, D.C. 20580, (202) 326-2970. SUPPLEMENTARY INFORMATION: On July 15, 2008, the FTC sought comment on the information collection requirements associated with the Franchise Rule, 16 CFR Part 436 (Control Number: 30840107).2 No comments were received. Pursuant to the OMB regulations, 5 CFR Part 1320, that implement the PRA, 44 U.S.C. 3501-3521, the FTC is providing this second opportunity for public comment while seeking OMB approval to extend the existing paperwork clearance for the Rule. All comments should be filed as prescribed in the ADDRESSES section above, and must be received on or before November 13, 2008. The Franchise Rule ensures that consumers who are considering a franchise investment have access to the material information they need to make an informed investment decision provided in a format that facilitates comparisons of different franchise offerings. The Rule requires that franchisors disclose this information to consumers and maintain records to facilitate enforcement of the Rule. Revisions to the Rule promulgated on March 30, 2007,3 which took final effect on July 1, 2008, after a one-year phasein, largely merged the Rule’s disclosure requirements with the Uniform Franchise Offering Circular (‘‘UFOC’’) disclosure format accepted by 15 states that have franchise registration and disclosure laws. This should significantly minimize any compliance burden beyond what is now required by state law. As amended, the Rule requires franchisors to furnish to prospective purchasers a disclosure document that provides information relating to the franchisor, its business, the nature of the proposed franchise, and any representations by the franchisor about financial performance regarding actual or potential sales, income, or profits made to a prospective franchise purchaser. The franchisor must preserve materially different copies of its disclosures and franchise agreements, as well as information that forms a reasonable basis for any financial performance representation it elects to make. These requirements are subject to FOR FURTHER INFORMATION CONTACT: 2 Requests for additional information or 3 PO 00000 Frm 00026 Fmt 4703 Sfmt 4703 60697 73 FR 40580. 72 FR 15444 et seq. E:\FR\FM\14OCN1.SGM 14OCN1 60698 Federal Register / Vol. 73, No. 199 / Tuesday, October 14, 2008 / Notices the PRA, and for which the Commission seeks to extend existing clearance.4 jlentini on PROD1PC65 with NOTICES Estimated annual hours burden: 16,750 hours Based on a review of trade publications and information from state regulatory authorities, staff believes that, on average, from year to year, there are approximately 2,500 sellers of franchises covered by the Rule, with perhaps about 10% of that total reflecting an equal amount of new and departing business entrants.5 Staff’s burden hour estimate reflects the incremental burden that part 436 may impose beyond the information and recordkeeping requirements imposed by state law and/or followed by franchisors who have been using the UFOC disclosure format nationwide.6 This estimate likely overstates the actual incremental burden because some franchisors, for various reasons, may not be covered by the Rule (e.g., they sell only franchises that qualify for the Rule’s large franchise investment exemption of at least $1 million).7 For October 31, 2008 to October 31, 2009, the first twelve months of prospective 3-year renewed PRA clearance, staff estimates that the average annual disclosure burden to update existing disclosure documents will be three hours each year for the 2,250 established franchisors, or 6,750 hours, and 30 hours each year for the 250 or so new entrant franchisors to prepare their initial disclosure documents, or 7,500 hours. These estimates for the amended Rule are based on staff’s prior estimates for the original Rule, and further adopt the 4 The current clearance under OMB Control Number 3084-0107 covers the disclosure and recordkeeping requirements of the original Franchise Rule, 16 CFR Part 436, which applied both to the sale of franchises and of business opportunity ventures. The disclosure and recordkeeping requirements applicable to business opportunity ventures are now separately set forth in 16 CFR Part 437, and are covered under recently assigned OMB Control Number 3084-0142. The portion of the prior clearance applicable to business format franchisors under Part 436 retains the preexisting OMB Control Number 3084-0107. 5 This is one-half of the number used in the 2005 clearance request, when both franchises and business opportunities were covered by the Rule, and reflects the fact that business opportunities are now separately covered by Part 437 and a separate OMB clearance. This number appears to be consistent with the number of business format franchise offerings registered in compliance with state franchise laws, and listed in franchise directories. 6 Staff estimates that about 95 percent of all franchisors use the UFOC format because the original Franchise Rule authorized use of the UFOC in lieu of the Rule disclosure format to satisfy the Rule’s disclosure requirements and reduce compliance burdens. 7 16 CFR 436.8(a)(5). This exemption was added by the amended Rule. VerDate Aug<31>2005 15:37 Oct 10, 2008 Jkt 217001 analysis of the 2005 clearance request and the Statement of Basis and Purpose (‘‘SBP’’) for the amended Rule.8 As discussed in the 2005 Notices and the SBP, as under the original Rule, covered franchisors also may need to maintain additional documentation for the sale of franchises in non-registration states, which could take up to an additional hour of recordkeeping per year. This yields an additional cumulative total of 2,500 hours per year for covered franchisors (1 hour x 2,500 franchisors). Part 436 of the amended Rule would also increase franchisors’ recordkeeping obligations. Specifically, a franchisor would be required to retain copies of receipts for disclosure documents, as well as materially different versions of its disclosure documents. Such recordkeeping requirements, however, are consistent with, or less burdensome, than those imposed by the states. Thus, staff estimates the average hours burden for new and established franchisors during the three-year clearance period ahead would be 16,750 ((30 hours of annual disclosure burden x 250 new franchisors = 7,500 hours) + (3 hours of average annual disclosure burden x 2,250 established franchisors = 6,750 hours) + (1 hour of annual recordkeeping burden x 2,500 franchisors = 2,500 hours)). Estimated annual labor cost burden for part 436: $3,595,000 Labor costs are derived by applying appropriate hourly cost figures to the burden hours described above. The hourly rates used below are estimated averages. As stated in the 2005 Notices, staff believes that an attorney will prepare the disclosure document, and at an estimated $250 per hour. Accordingly, staff estimates that 250 new franchisors will each annually incur $7,500 in labor costs (30 hours x $250 per hour) and 2,250 established franchisors will each incur $750, annually, in labor costs (3 hours x $250 per hour). Further, staff anticipates that recordkeeping under part 436 will be performed by clerical staff at approximately $13 per hour. Thus, 2,500 hours of recordkeeping burden per year for all covered franchisors will amount to a total annual labor cost of $32,500. 8 70 FR 28937, 28940 (May 19, 2005); 70 FR 51817, 51819 (Aug. 31, 2005) (‘‘2005 Notices’’); 72 FR 15444, 15542 (Mar. 30, 2007). Although the 2005 Notices and the amended Rule’s SBP assumed that additional time (cumulatively, 2,750 hours) would be required to prepare disclosures during the transition to compliance with the amended Rule, the one-year transition period ended on July 1, 2008, when the amended Rule took full effect. PO 00000 Frm 00027 Fmt 4703 Sfmt 4703 Cumulatively, then, total estimated labor costs under part 436 is $3,595,000 (($7,500 attorney costs x 250 new franchisors = $1,875,000) + ($750 attorney costs x 2,250 established franchisors = $1,687,500) + ($13 clerical costs x 2,500 franchisors = $32,500)). Estimated non-labor costs for part 436: $8,000,000 As an initial matter, in developing cost estimates, Commission staff consulted with practitioners who prepare disclosure documents for a cross-section of franchise systems. Accordingly, the Commission believes that its cost estimates are representative of the costs incurred by franchise systems generally. In addition, many franchisors establish and maintain websites for ordinary business purposes, including advertising their goods or services and to facilitate communication with the public. Accordingly, any costs franchisors would incur specifically as a result of electronic disclosure under part 436 appear to be minimal. As set forth in the 2005 Notices, staff estimates that the non-labor burden incurred by franchisors under part 436 will differ based on the length of the disclosure document and the number of disclosure documents produced. Staff estimates that 2,000 franchisors (80% of total franchisors covered by the Rule) will print and mail 100 disclosure documents at $35 each. Thus, these franchisors will each incur $3,500 in printing and mailing costs. Staff estimates that the remaining 20% of covered franchisors (500) will transmit 50% of their 100 disclosure documents electronically, at $5 per electronic disclosure. Thus, these franchisors will each incur $2,000 in distribution costs (($250 for electronic disclosure [$5 for electronic disclosure x 50 disclosure documents]) + ($1,750 for printing and mailing [$35 for printing and mailing x 50 disclosure documents])). Accordingly, the cumulative annual non-labor costs for part 436 of the amended Rule is approximately $8,000,000 (($3,500 printing and mailing costs x 2,000 franchisors = $7,000,000) + ($250 electronic distribution costs + $1,750 printing and mailing costs) x 500 franchisors = $1,000,000)). William Blumenthal, General Counsel. [FR Doc. E8–24232 Filed 10–10–08: 8:45 am] [BILLING CODE: 6750–01–S E:\FR\FM\14OCN1.SGM 14OCN1

Agencies

FEDERAL TRADE COMMISSION

[Federal Register Volume 73, Number 199 (Tuesday, October 14, 2008)]
[Notices]
[Pages 60696-60698]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-24232]


=======================================================================
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FEDERAL TRADE COMMISSION


Agency Information Collection Activities; Submission for OMB 
Review; Comment Request; Extension

AGENCY: Federal Trade Commission (``Commission'' or ``FTC'').

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The information collection requirements described below will 
be

[[Page 60697]]

submitted to the Office of Management and Budget (``OMB'') for review, 
as required by the Paperwork Reduction Act (``PRA''). The FTC is 
seeking public comments on its proposal to extend through October 31, 
2011, the current PRA clearance for information collection requirements 
contained in its Trade Regulation Rule on Disclosure Requirements and 
Prohibitions Concerning Franchising (``Franchise Rule''). That 
clearance expires on October 31, 2008.

DATES: Comments must be submitted on or before November 13, 2008.

ADDRESSES: Interested parties are invited to submit written comments 
electronically or in paper form. Comments should refer to ``Franchise 
Rule, PRA Comment, FTC File No. P094400'' to facilitate the 
organization of comments. Please note that comments will be placed on 
the public record of this proceeding--including on the publicly 
accessible FTC website, at (https://www.ftc.gov/os/
publiccomments.shtm)--and therefore should not include any sensitive or 
confidential information. In particular, comments should not include 
any sensitive personal information, such as an individual's Social 
Security Number; date of birth; driver's license number or other state 
identification number, or foreign country equivalent; passport number; 
financial account number; or credit or debit card number. Comments also 
should not include any sensitive health information, such as medical 
records or other individually identifiable health information. In 
addition, comments should not include any ``[t]rade secrets and 
commercial or financial information obtained from a person and 
privileged or confidential. . . .,'' as provided in Section 6(f) of the 
FTC Act, 15 U.S.C. 46(f), and Commission Rule 4.10(a)(2), 16 CFR 
4.10(a)(2). Comments containing material for which confidential 
treatment is requested must be filed in paper form, must be clearly 
labeled ``Confidential,'' and must comply with FTC Rule 4.9(c).\1\
---------------------------------------------------------------------------

    \1\ FTC Rule 4.2(d), 16 CFR 4.2(d). The comment must be 
accompanied by an explicit request for confidential treatment, 
including the factual and legal basis for the request, and must 
identify the specific portions of the comment to be withheld from 
the public record. The request will be granted or denied by the 
Commission's General Counsel, consistent with applicable law and the 
public interest. See FTC Rule 4.9(c), 16 CFR 4.9(c).
---------------------------------------------------------------------------

    Because paper mail addressed to the FTC is subject to delay due to 
heightened security screening, please consider submitting your comments 
in electronic form. Comments filed in electronic form should be 
submitted by using the following weblink: (https://
secure.commentworks.com/ftc-franchiserule) (and following the 
instructions on the web-based form). To ensure that the Commission 
considers an electronic comment, you must file it on the web-based form 
at the weblink (https://secure.commentworks.com/ftc-franchiserule). If 
this Notice appears at (https://www.regulations.gov/search/index.jsp), 
you may also file an electronic comment through that website. The 
Commission will consider all comments that regulations.gov forwards to 
it. You may also visit the FTC website at https://www.ftc.govto read the 
Notice and the news release describing it.
    A comment filed in paper form should include the ``Franchise Rule, 
PRA Comment, FTC File No. P094400'' reference both in the text and on 
the envelope, and should be mailed or delivered to the following 
address: Federal Trade Commission, Office of the Secretary, Room H-135 
(Annex J), 600 Pennsylvania Avenue, NW, Washington, DC 20580. The FTC 
is requesting that any comment filed in paper form be sent by courier 
or overnight service, if possible, because U.S. postal mail in the 
Washington area and at the Commission is subject to delay due to 
heightened security precautions.
    All comments should additionally be submitted to: Office of 
Information and Regulatory Affairs of OMB, Attention: Desk Officer for 
the Federal Trade Commission. Comments should be submitted via 
facsimile to (202) 395-6974 because U.S. Postal Mail is subject to 
lengthy delays due to heightened security precautions.
    The FTC Act and other laws the Commission administers permit the 
collection of public comments to consider and use in this proceeding as 
appropriate. The Commission will consider all timely and responsive 
public comments that it receives, whether filed in paper or electronic 
form. Comments received will be available to the public on the FTC 
website, to the extent practicable, at (https://www.ftc.gov/os/
publiccomments.shtm). As a matter of discretion, the Commission makes 
every effort to remove home contact information for individuals from 
the public comments it receives before placing those comments on the 
FTC website. More information, including routine uses permitted by the 
Privacy Act, may be found in the FTC's privacy policy, at (https://
www.ftc.gov/ftc/privacy.shtm).

FOR FURTHER INFORMATION CONTACT: Requests for additional information or 
copies of the proposed information requirements for the Franchise Rule 
should be addressed to Craig Tregillus, Staff Attorney, Division of 
Marketing Practices, Bureau of Consumer Protection, Federal Trade 
Commission, Room H-238, 600 Pennsylvania Ave., N.W., Washington, D.C. 
20580, (202) 326-2970.

SUPPLEMENTARY INFORMATION: On July 15, 2008, the FTC sought comment on 
the information collection requirements associated with the Franchise 
Rule, 16 CFR Part 436 (Control Number: 3084-0107).\2\ No comments were 
received. Pursuant to the OMB regulations, 5 CFR Part 1320, that 
implement the PRA, 44 U.S.C. 3501-3521, the FTC is providing this 
second opportunity for public comment while seeking OMB approval to 
extend the existing paperwork clearance for the Rule. All comments 
should be filed as prescribed in the ADDRESSES section above, and must 
be received on or before November 13, 2008.
---------------------------------------------------------------------------

    \2\ 73 FR 40580.
---------------------------------------------------------------------------

    The Franchise Rule ensures that consumers who are considering a 
franchise investment have access to the material information they need 
to make an informed investment decision provided in a format that 
facilitates comparisons of different franchise offerings. The Rule 
requires that franchisors disclose this information to consumers and 
maintain records to facilitate enforcement of the Rule. Revisions to 
the Rule promulgated on March 30, 2007,\3\ which took final effect on 
July 1, 2008, after a one-year phase-in, largely merged the Rule's 
disclosure requirements with the Uniform Franchise Offering Circular 
(``UFOC'') disclosure format accepted by 15 states that have franchise 
registration and disclosure laws. This should significantly minimize 
any compliance burden beyond what is now required by state law.
---------------------------------------------------------------------------

    \3\ 72 FR 15444 et seq.
---------------------------------------------------------------------------

    As amended, the Rule requires franchisors to furnish to prospective 
purchasers a disclosure document that provides information relating to 
the franchisor, its business, the nature of the proposed franchise, and 
any representations by the franchisor about financial performance 
regarding actual or potential sales, income, or profits made to a 
prospective franchise purchaser. The franchisor must preserve 
materially different copies of its disclosures and franchise 
agreements, as well as information that forms a reasonable basis for 
any financial performance representation it elects to make. These 
requirements are subject to

[[Page 60698]]

the PRA, and for which the Commission seeks to extend existing 
clearance.\4\
---------------------------------------------------------------------------

    \4\ The current clearance under OMB Control Number 3084-0107 
covers the disclosure and recordkeeping requirements of the original 
Franchise Rule, 16 CFR Part 436, which applied both to the sale of 
franchises and of business opportunity ventures. The disclosure and 
recordkeeping requirements applicable to business opportunity 
ventures are now separately set forth in 16 CFR Part 437, and are 
covered under recently assigned OMB Control Number 3084-0142. The 
portion of the prior clearance applicable to business format 
franchisors under Part 436 retains the pre-existing OMB Control 
Number 3084-0107.
---------------------------------------------------------------------------

Estimated annual hours burden: 16,750 hours

    Based on a review of trade publications and information from state 
regulatory authorities, staff believes that, on average, from year to 
year, there are approximately 2,500 sellers of franchises covered by 
the Rule, with perhaps about 10% of that total reflecting an equal 
amount of new and departing business entrants.\5\ Staff's burden hour 
estimate reflects the incremental burden that part 436 may impose 
beyond the information and recordkeeping requirements imposed by state 
law and/or followed by franchisors who have been using the UFOC 
disclosure format nationwide.\6\ This estimate likely overstates the 
actual incremental burden because some franchisors, for various 
reasons, may not be covered by the Rule (e.g., they sell only 
franchises that qualify for the Rule's large franchise investment 
exemption of at least $1 million).\7\
---------------------------------------------------------------------------

    \5\ This is one-half of the number used in the 2005 clearance 
request, when both franchises and business opportunities were 
covered by the Rule, and reflects the fact that business 
opportunities are now separately covered by Part 437 and a separate 
OMB clearance. This number appears to be consistent with the number 
of business format franchise offerings registered in compliance with 
state franchise laws, and listed in franchise directories.
    \6\ Staff estimates that about 95 percent of all franchisors use 
the UFOC format because the original Franchise Rule authorized use 
of the UFOC in lieu of the Rule disclosure format to satisfy the 
Rule's disclosure requirements and reduce compliance burdens.
    \7\ 16 CFR 436.8(a)(5). This exemption was added by the amended 
Rule.
---------------------------------------------------------------------------

    For October 31, 2008 to October 31, 2009, the first twelve months 
of prospective 3-year renewed PRA clearance, staff estimates that the 
average annual disclosure burden to update existing disclosure 
documents will be three hours each year for the 2,250 established 
franchisors, or 6,750 hours, and 30 hours each year for the 250 or so 
new entrant franchisors to prepare their initial disclosure documents, 
or 7,500 hours. These estimates for the amended Rule are based on 
staff's prior estimates for the original Rule, and further adopt the 
analysis of the 2005 clearance request and the Statement of Basis and 
Purpose (``SBP'') for the amended Rule.\8\
---------------------------------------------------------------------------

    \8\ 70 FR 28937, 28940 (May 19, 2005); 70 FR 51817, 51819 (Aug. 
31, 2005) (``2005 Notices''); 72 FR 15444, 15542 (Mar. 30, 2007). 
Although the 2005 Notices and the amended Rule's SBP assumed that 
additional time (cumulatively, 2,750 hours) would be required to 
prepare disclosures during the transition to compliance with the 
amended Rule, the one-year transition period ended on July 1, 2008, 
when the amended Rule took full effect.
---------------------------------------------------------------------------

    As discussed in the 2005 Notices and the SBP, as under the original 
Rule, covered franchisors also may need to maintain additional 
documentation for the sale of franchises in non-registration states, 
which could take up to an additional hour of recordkeeping per year. 
This yields an additional cumulative total of 2,500 hours per year for 
covered franchisors (1 hour x 2,500 franchisors).
    Part 436 of the amended Rule would also increase franchisors' 
recordkeeping obligations. Specifically, a franchisor would be required 
to retain copies of receipts for disclosure documents, as well as 
materially different versions of its disclosure documents. Such 
recordkeeping requirements, however, are consistent with, or less 
burdensome, than those imposed by the states.
    Thus, staff estimates the average hours burden for new and 
established franchisors during the three-year clearance period ahead 
would be 16,750 ((30 hours of annual disclosure burden x 250 new 
franchisors = 7,500 hours) + (3 hours of average annual disclosure 
burden x 2,250 established franchisors = 6,750 hours) + (1 hour of 
annual recordkeeping burden x 2,500 franchisors = 2,500 hours)).

Estimated annual labor cost burden for part 436: $3,595,000

    Labor costs are derived by applying appropriate hourly cost figures 
to the burden hours described above. The hourly rates used below are 
estimated averages.
    As stated in the 2005 Notices, staff believes that an attorney will 
prepare the disclosure document, and at an estimated $250 per hour. 
Accordingly, staff estimates that 250 new franchisors will each 
annually incur $7,500 in labor costs (30 hours x $250 per hour) and 
2,250 established franchisors will each incur $750, annually, in labor 
costs (3 hours x $250 per hour).
    Further, staff anticipates that recordkeeping under part 436 will 
be performed by clerical staff at approximately $13 per hour. Thus, 
2,500 hours of recordkeeping burden per year for all covered 
franchisors will amount to a total annual labor cost of $32,500.
    Cumulatively, then, total estimated labor costs under part 436 is 
$3,595,000 (($7,500 attorney costs x 250 new franchisors = $1,875,000) 
+ ($750 attorney costs x 2,250 established franchisors = $1,687,500) + 
($13 clerical costs x 2,500 franchisors = $32,500)).

Estimated non-labor costs for part 436: $8,000,000

    As an initial matter, in developing cost estimates, Commission 
staff consulted with practitioners who prepare disclosure documents for 
a cross-section of franchise systems. Accordingly, the Commission 
believes that its cost estimates are representative of the costs 
incurred by franchise systems generally. In addition, many franchisors 
establish and maintain websites for ordinary business purposes, 
including advertising their goods or services and to facilitate 
communication with the public. Accordingly, any costs franchisors would 
incur specifically as a result of electronic disclosure under part 436 
appear to be minimal.
    As set forth in the 2005 Notices, staff estimates that the non-
labor burden incurred by franchisors under part 436 will differ based 
on the length of the disclosure document and the number of disclosure 
documents produced. Staff estimates that 2,000 franchisors (80% of 
total franchisors covered by the Rule) will print and mail 100 
disclosure documents at $35 each. Thus, these franchisors will each 
incur $3,500 in printing and mailing costs. Staff estimates that the 
remaining 20% of covered franchisors (500) will transmit 50% of their 
100 disclosure documents electronically, at $5 per electronic 
disclosure. Thus, these franchisors will each incur $2,000 in 
distribution costs (($250 for electronic disclosure [$5 for electronic 
disclosure x 50 disclosure documents]) + ($1,750 for printing and 
mailing [$35 for printing and mailing x 50 disclosure documents])).
    Accordingly, the cumulative annual non-labor costs for part 436 of 
the amended Rule is approximately $8,000,000 (($3,500 printing and 
mailing costs x 2,000 franchisors = $7,000,000) + ($250 electronic 
distribution costs + $1,750 printing and mailing costs) x 500 
franchisors = $1,000,000)).

William Blumenthal,
General Counsel.
[FR Doc. E8-24232 Filed 10-10-08: 8:45 am]
[BILLING CODE: 6750-01-S

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