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Excuses, Excuses: FTC's Top Franchise Enforcer Has Heard It All

By ALM Staff | Law Journal Newsletters |
August 01, 2003

Steven Toporoff is the Franchise Program Coordinator at the Federal Trade Commission (FTC), and one of the key people working on Franchise Rule enforcement. At the International Franchise Association (IFA) Legal Symposium in May 2003, Mr. Toporoff provided an update on federal regulatory developments and shared insights about how franchise enforcers go about their work. He also compiled the following list of excuses that he and fellow examiners hear from franchisors and their legal representatives. As Mr. Toporoff observed, “franchise attorneys should know better.”

10. I'm not a franchisor, I'm offering a business opportunity. “This statement is a huge red flag for us,” said Toporoff, adding that since most FTC enforcement actions under the Franchise Rule are taken against “business opportunity” providers, claiming to be a business opportunity hardly provides any excuse.

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