The FTC's franchise rule: twenty-three years after the promulgation: hearing before the Subcommittee on Commerce, Trade

OCLC Number: (OCoLC)50878519 Subject: Franchises (Retail trade) -- United States. Excerpt: ...wal and supply sourcing policies, whether the franchisor is required to buy all supplies from the franchisor or its designee. Now I have had that experience myself having franchises in which I have to buy everything from the franchisor, and then pretty soon I end up buying the installation by the franchisor. Moreover, the franchisees identify encroachment as yet another contentious problem. Where a new franchisee was assigned a franchise territory they encroached on a preexisting franchisee's territory. Holiday Inn sells you a franchise. You have a Holiday Inn, and pretty soon right next to it goes a Crown Plaza. They are upscale, and right next to it goes their budget hotel. And so here you thought you had a franchise with Holiday Inn, you find you have two competitors side by side, a low end and a high end. You go to the book to look where your property is and the three properties are there together and you thought you had it. Or they give you a franchise and they tell you that there will not be a franchise within 5 miles of your property. And lo and behold, the rules change and they say, Mr. Stearns, we have done a study which shows we are now putting another Howard Johnson right within 3 miles of your Howard Johnson. And then I say to them, well, that is not fair because you told me I was going to have this. And they say, well, our rules changed because the population density changes and that means, Mr. Stearns, we are putting another Howard Johnson within 3 miles of you and there is nothing in the contract that says we can't do this. And so, lo and behold, another franchise Howard Johnson. It might be my friend at Chamber of Commerce, at the Kiwanis, who sits with me at lunch who suddenly is my strong competitor, and he is a brand new property, I am an older property and he is now within 3 miles and, lo and behold, he t...