Question

Under FTC Rule 436, what triggers can lead a company to be deemed to have "significant control" over a franchisee's operations, and what are the implications of this rule?

Answer 1

Under FTC Rule 436, a company can have "significant control" over a franchisee's operations if it exercises control over key aspects of the franchisee's business. This rule has implications for the legal obligations and responsibilities of the franchisor.

Step-by-step explanation:

Under FTC Rule 436, a company can be deemed to have "significant control" over a franchisee's operations if it exercises control over key aspects of the franchisee's business, such as pricing, marketing, or policies. This can include situations where the franchisor requires the franchisee to use specific suppliers or systems, or sets restrictions on the franchisee's operations. The implications of this rule are that the franchisor may have legal obligations and responsibilities towards the franchisee, and may be held liable for the franchisee's actions or violations.