FTC warns franchisors of illegal non-disparagement clauses and undisclosed fees.
The Federal Trade Commission (FTC) warns franchisors that non-disparagement clauses and undisclosed fees are illegal. FTC Chair Lina Khan highlighted franchisor practices, such as failure to fully disclose fees upfront, which go unreported due to fear of retaliation. The regulator emphasized that contractual terms prohibiting franchisees from reporting potential law violations are unfair, unenforceable, and illegal.
July 12, 2024
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