In the matter of FRANCHISE DUE DILLIGENCE for the buyer,  do the state
governments and our federal government,  The FTC,  effectively protect
prospective franchise buyers from fraud and bad franchise purchases
through the current federal and state disclosure laws and the federal
government warning and disclaimer required by law to be placed in the
front of the Offering Circulars?  Question: Is it really full
disclosure when franchisors  obscure the business failures of
franchises through classifications of "Terminations" and "Sale
Transfers" in the franchise statistics section of these disclosure
circulars WITHOUT DISCLOSING the reasons for the Teminations and
Sale-Transfers?

DISCUSSION: Terminations and sale-transfers are generally business
failures.  The sale-transfer of a profitable franchise is the rare
event.  The percentage rate of the business failures of a corporate
franchise certainly is material  to the prospective franchise buyer
and is an ascertainable fact that should be clearly disclosed under
law in the offering circulars when prospective franchisees are doing
their due diligence.

Apparently,  those franchisees whose businesses have failed agree in
their original franchise contract or in the sale-transfer-consent
agreement to permit the franchisor to disclose the ex-franchisees
name, home address, and home telephone number in the franchisor's  new
offering cirucular.   However,  these failed franchisees have signed
waivers and conidentiality agreements with the franchisor that
prohibits them from talking about their business relationship with the
franchisor, or their business failure, or the sale-transfer in order
to obtain the required consent of the franchisor to sell-transfer the
failed business.
The great majority of these "sell-transfers" represent almost a
complete loss of the investment of the franchisee who is pushed and
squeezed to sell-transfer to avoid a further loss of money that will
be owed to creditors because of the franchisee's personal guarantees
of the leases that were necessary to buy the franchise and open the
business.  At least,  in a sale-transfer,  the new buyer assumes the
leases and the failed franchisee is spared further financial stress
and the loss of personal assets.

It appears that the franchisors can "legally" invade the privacy of
their ex-franchisees by publishing the private information (the name
and home telephone nhumber and address of the failed franchisee} in
the disclosure circulars to provide the appearance  under the law of
making full disclosure to prospective buyers.  However,  these
franchisees have signed confidentiality agreements (gag orders) in the
process of sale-transfer that prohibits them from talking about their
failed business and their former business relationship with the
franchisor and the terms of the sale-transfer with any prospective
franchise buyer.  Isn't is disengenuous of both government regulators
and the franchisors and the courts to suggest that these names and
addresses of gagged individuals constitutes  "full disclosure" under
the law?
The franchise industry has lots of clout and is viewed by some as
having taken the economy our of the risk of a deep recession in 2003. 
Franchising is a new "trickle down" version of business in our economy
and the global economy as well. Government views franchising as good
for the economy and we do see successful franchises everywhere. 
However,  the failed franchisees are hidden from public view and
statistical information concerning failure of franchises is rare and
undocumented.  Even the SBA who guarantees billions of dollars for
franchise startups appears not to gather statistics on defaulted
franchise loans.   The nation's banks profit greatly from guaranteed
franchise loans.  Franchising provides small business opportunities
and jobs in Ameica's communities.
Only the franchisee,  the small business man or woman, who has risked
his money in the investment loses when the business fails and there is
a sale-transfer. These wounded franchisees who are often forced into
bankruptcy and who lose their life savings, their jobs,  and sometimes
their marriages and their health are hidden from the view of the
public and fade away into the American landscape.  Many are back to
where they started -----looking for a job -----but minus their safety
net of their savings.  Many franchised businesses provide only a job
for the owner and PT help and there are no profits  and the franchisee
never gets beyond break-even status while providing profits for the
franchisor.  They can't sell and they can't leave and are chained to
break-even status.
Really good franchises with good business plans provide jobs and 
profits for their franchisees and have a low percentage rate of
business failures.

Maybe our elected oficials and the state and federal government
regulators believe that government's failure to require franchise
corporations to clearly identify and report the true percentage of
"failed" franchises in the offering circulars is for the public good. 
Perhaps,  this is the reason they allow the franchisors to obscure the
rate of failure of their franchises under the disclosure rules.

Is this a further sign that our democrdatic government, our elected
oficials, consider the inderests of the corporate structure and big
business to be more important than the protection of the individual in
our nation today.  When government buys the corporate  version of the 
"public good",  are the rights of individuals compromised?  Do
individuals atand as equals with corporations before the law?  I don't
think so!