Current through Vol. 24-16, September 15, 2024
Rule 803.
(1) The
following practices shall constitute, without limitation, false, fraudulent,
misleading, and deceptive advertising in connection with the offer or sale of a
franchise:
(a) Failure to disclose in any
communications media advertising the required total initial and deferred
franchise fee for the franchise, or misrepresent, in any way, the
fee.
(b) Misrepresentation of the
training or management assistance available to the franchisee. The failure to
disclose that little or none is provided, unless this requirement is waived by
the administrator, constitutes a misrepresentation.
(c) Misrepresentation or causing confusion or
misunderstanding regarding the source, sponsorship, approval, or certification
of franchised goods or services.
(d) Dissemination of an advertisement in a
language other than English without including therein the required disclosures
or limitations on the offer advertised in the language principally used in the
advertisement.
(e) Obtaining leads
to prospective franchisees by placing classified advertisements designated or
captioned "men wanted to train for . . . ," "help wanted," "employment,"
"business opportunities," or by words or terms of similar import, so as to
represent directly or by implication that employment is being offered when, in
fact, it is not.
(f) Designation or
reference to sale representatives as "registrars," "counselors," "advisors," or
words of similar import that misrepresent, in any manner, the titles,
qualifications, training, experience, or status of salesmen, agents, employees,
or other representatives.
(g)
Representation in an advertisement that a person receive goods or services
"free," "without charge," or any other term of similar import when the product
or service is not, in fact, free.
(2) An advertisement of a guarantee or
warranty relating to the sale of franchised goods and services to the
franchisee, or relating to the repurchase of the goods, shall clearly and
conspicuously disclose the following:
(a) The
nature and extent of the guarantee, including disclosure of the following:
(i) The product or service being
guaranteed.
(ii) The
characteristics or properties of the designated product or service covered by
or excluded from the guarantee.
(iii) The conditions one claiming under the
guarantee shall meet before the guarantor will fulfill its obligation under the
guarantee.
(b) The
manner in which the guarantor will perform.
(c) The identify of the guarantor.
(3) A franchisor shall not
advertise or represent that a product is guaranteed, or that it shall
repurchase the product for a specified price, when it cannot promptly fulfill
its obligations under the guarantee.
(4) Deceptive price advertising in connection
with the offer or sale of a franchise includes, among other practices, the
following:
(a) Falsely representing, in any
manner, that goods or services are offered for sale at a reduction.
(b) Representing that prices being charged
are a reduction by "comparing" prices of goods of like kind and quality, where
the comparison being made is not with other goods of essentially similar
quality, obtainable in the area, and at an established price.
(c) Advertising a special price or limited
offer to persons when, in fact, the offer is not limited and is being made to
many persons on a mass advertising or marketing basis, or when the price is the
same as that charged to those occupying a status similar to that of a
franchisee.
