12/01/2022

Proposed Rulemaking: FTC Dials in on Business Opportunities

The agency is seeking public comment on whether to modify or expand its Business Opportunity Rule

At its most recent open meeting, the Federal Trade Commission voted unanimously to issue an Advance Notice of Proposed Rulemaking, seeking public comment on whether to modify or expand its Business Opportunity Rule.

The Business Opportunity Rule, first adopted in 2012, requires sellers of “business opportunities” to be able to substantiate any earnings claims they make, and to make certain enumerated disclosures pertaining to the potential transaction. These disclosures include:

• The seller’s identifying information
• Whether the seller is making earnings claims and, if so, substantiation for those claims
• Whether the seller, affiliates of the seller, or its leaders have been involved in legal actions concerning misrepresentation, fraud, securities law violations or unfair or deceptive practices in the previous 10 years
• The terms of the seller’s cancellation or refund policy, if it has one
• A list of people who have purchased the business opportunity in the previous three years

Among other things, the FTC is seeking comment on whether the rule should be expanded to cover business coaching or mentoring programs, e-commerce opportunities, investment opportunities and more.

Please select this link to read the complete article from Venable.