Is Colorado changing the rules of franchise disclosure?

If so, then it could mean more work for franchisors.  The Colorado Court of Appeals has set forth a decision which, although the parties are seeking certiorari review, could impact the way franchisors disclose information to prospective franchisees. The case is Coffee Bean, LLC v. Peaberry Coffee, Inc.  In that case the general issue of whether compliance with the FTC rules for disclosure is enough.  So far, the Appellate Court has spoken about the failure of the franchisor to properly lay out the financials for company owned units, specifically the losses of those units. We will keep a close eye on this case as it could have great impact on franchisor disclosure.  Depending upon the outcome of this case, many franchisors may have to look to local state law more closely to determine whether any additional information must be disclosed above and beyond the general FTC guidelines. For more information about this case and franchising, please contact Lynne Shelton in our Austin, TX office or Jason Power in our Tampa, FL office.