As the first quarter of 2022 comes to a close, the issues of staffing, rising wages, supply shortages, and now adding to those issues, rising interest rates, continue to make business extremely challenging for everyone, including franchisees. Amid all of this bad news, however, there is, for the first time in two decades, some good news for those of us interested in the protection of franchisees and their financial investments. Indeed, since my November article, there have been four notable developments I would like to address.

First, on Dec. 7, 2021, the North American Securities Administrators Association (NASAA) sent out a proposed Statement of Policy for public comment. This policy addressed the very common practice of franchisors including questionnaires and acknowledgements in their materials to franchisees, which, in essence, require franchisees to somehow acknowledge that they have not been defrauded. Of course, the problem with this is that, oftentimes, franchisees probably do not know what rights he or she has and, if fraud has been committed, probably does not understand that fraud has taken place until a much later date. Unfortunately, when franchisees come forward with complaints at this later point in time, after having discovered franchisor’s misconduct, their “statements” in these questionnaires and acknowledgements are used against them and their cases are promptly dismissed.

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