F .T.C. P ubli c  C omm e nt 116
" Ga g"  o rde r a rr a n g e ment s ofte n for m a n e c e ss a r y   ince nti ve  for  f ra n c hisors t o e nter  int o
se tt leme nt agr e e m e nts wi th fr a nc hise e s. Ga g  o rde r  a rr a n ge ments shoul d not be r e g ulate d, a nd
the y  shoul d c e rta inl y  not be  proh ibi ted… I t i s m y
b e li e f tha t t he  F ra n c hise Rul e  shoul d not appl y  
to i nter na ti ona l sale s, a nd   I   a g re e d with all of the   major  point s that we re  m
a de  in t he  ori g inal
discussi ons.
 U.S. Federal Trade Commission   October 30, 1997     Public Comment   Carl Jeffers     Request for publi c comment on possible revisions to The  Franchise Rule.     Comment #116     FEDERAL TRADE COMMISSION
16 C F R  P a rt 436
Tr a de  R e g ulations R ule on Disc losure  R e quire me nts and Prohibi ti ons C on c e rnin g  F ra n c hisi ng  
a nd
B usiness Oppor tuni t y  Ve nture s
C omm e nts on  P ropose d C ha ng e s to 1 6 C F R  P a rt 436
The  following   c omm e nts and obse rva ti ons a re  sub mi tt e d b y  C a rl J e ff e rs, Pr e sident of I ntel
Ma rke ti n g  S y stem, a   fr a n c hise c onsul ti ng  fi rm spe c ializ ing  in fr a nc his e  stru c turing   a nd fr a nc hise
mar ke ti ng   a nd sa les.
The  c omm e nts wi ll  follow the  ba sic c h ronolog i c a l orde r of  the disc ussi on of the  va rious subj e c t
topi c s a s the y   a ppe a r in The  R ule f rom P oint   I  thr oug h I X .
Que sti on/Topi c : S hould The  R ule be  a mend e d to re quire  disclosur e  of la w suit s filed b y  
fr a nc hisors a g
a inst  fr a nc hisee s?
C omm e nt/ R e sponse: A spe c ific  c h a n g e  in The  R u le to r e quire  disclosur e  of  law suit s b y  
fr a nc hisors m a y  be  unne c e ssar y . As a  pr a c ti c a l m a tt e r f r a nc hisor ini ti a ted l a wsuits  a re  oft e n
ti mes vie we d fa vor a bl y  b y   the c ompan y  a s a n indi c a ti on of  
the c ompan y 's d e sire  to either  
e nfor c e  it s st a nda rds, c on sis tenc y , p rote c ti on of  tra de mar ks, or d e mons tra te it s c omm it ment to
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