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Should the States Franchise Out Their Registration Processes?

John Arden, at Trade Regulation Talk, discusses franchise regulation, quoting the US Dean of Franchising,

"Atlanta attorney Rupert M. Barkoff bemoans the United States' "overly complex and extremely inefficient" franchise sales regulatory system, which involves both federal and state regulation, no federal preemption, and a lack of harmonization among state regulatory schemes.

Although he has made similar complaints since 1981, the shortcomings of the U.S. system were brought home to him again when he recently performed work for Australian franchise companies entering the U.S.

"Like the United States, Australia--a highly franchised country--relies upon disclosure as the primary way to prevent franchise sales fraud and to ensure that prospective franchisees can make informed purchasing decisions.

However, the Australians have no registration procedures, and franchise sales are regulated only at the federal level.

Thus, their system has avoided two of the pitfalls of ours. This makes the Australians highly critical of our system. As I have previously noted in various publications, they think we are 'mad.'"

Full post as published by Misleading Advertising Law on June 25, 2008 (boomark / email).