Federal Judge's New Decision Makes it Easier Than Ever For You to Get a Refund
I think many (maybe even most) sellers violated this new interpretation of the FTC law when they sell a Business Opportunity or Franchise.
The FTC takes this as one of the most serious violations a seller can commit. Armed with this new information, one letter or one phone call could GET YOU A FULL REFUND in a HURRY!
I'm talking about a Federal judge's new interpretation of the "earnings claims" rule. Let me give you a little history about earning claims.
Before 1970 there were no government regulations on earnings claims. Then in 1970 California passed a law (and many other states quickly followed) that put such strict rules on the use of earnings claims that almost all Business Opportunity and Franchise Sellers quit making any earnings claims. That is "officially" the Sellers quit making any earnings claims. I'm sure a lot of salespeople were still talking about how much money could be made so they could sell more.
Then in 1986 the FTC issued a ruling saying that Earnings Claims must have a reasonable basis. That ruling left a lot of room for Business Opportunity and Franchise Sellers to make earnings claims with very little or questionable data to support the claims.
Now a Federal Judge in the FTC vs. Minuteman Press case has said the 1986 earnings claims ruling means the Seller must have a "high degree" of substantiation and he basically said "written financial statements from existing franchisees" would be the only thing that would be acceptable to qualify as a "high degree of substantiation" to back up any earnings claims that are made".
The good thing for you about the new ruling is that it is NOT a new law that takes effect from now on. It is a new interpretation of the old law or ruling. The judge is saying this is what the law meant form day one in 1986. Maybe it's not exactly fair to the company selling Business Opportunities or Franchises, but it's good news for you.
I doubt if the Seller gave you any written financial statements from existing franchise or business opportunity owners when the company or one of their salespeople were trying to how tell (directly or indirectly) how much money you would make if you bought this business.
Of course, just knowing this information won't automatically get you a refund. See Many, if not Most, Sellers, Dance Around Earnings Claims Rules for complete details about how to use this information to get your money back from the Business Opportunity or Franchise you purchased.
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