Federal Trade Commission building in Washington, D.C. (Photo: Diego M. Radzinschi/ALM) FTC Cautions Franchisors Against Imposing 'Unfair and Deceptive' Practices Against Franchisees
"Today the Commission is making clear that contractual terms prohibiting franchisees from reporting potential law violations to the government are unfair, unenforceable, and illegal," FTC Chair Lina Khan said.
July 15, 2024 at 03:27 PM
4 minute read
Contracts
The Federal Trade Commission is warning franchisors against using "unfair and deceptive practices" against franchisees following a yearlong probe that found some franchisors improperly limited franchisees' ability to speak to regulators and imposed fees not previously disclosed.
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Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
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