From: JMANUSZAK@aol.com

To: HQ.HQ02(franpr)

Date: 4/20/97 9:44pm

Subject: UFOC comments regarding Franchisee/Franchisor relations

I am a franchise owner of Domino's Pizza. I would like to reiterate a few comments which are relevant regarding the proposed changes with a UFOC. This proposed change does not protect the franchisee with unforseen changes which may occur after the contract is signed. It is my opinon the FTC should prohibit franchisors from:

1. requiring outgoing franchisees to sign confidentiality statements or gag orders that stop them from discussing their situation with prospective or existing franchisees;

 

2. requiring franchisees to sign general releases and waivers, forcing them to give up all their legal rights and claims;

 

3. requiring franchisees to sign contracts that contain integration clauses which specifically allow franchisors to make false statements and then hide behind their contracts; and

 

4. requiring franchisees to sign post-term covenants not-to-compete which then prevent them from earning a living.

The FTC should take action against franchisors who intimidate or retaliate against their franchisees, directly or indirectly, for getting together for any legitimate business purpose.

The FTC should mandate that franchisors disclose the existence and identity of all franchisee associations within their systems to all potential and existing franchisees. Along this same line, the FTC should mandate that the franchisor make available to all franchisee associations in their system the current list of franchisees in the system on an ongoing basis.

The FTC should begin dealing with issues important to current franchisees. These include:

1. devaluing of franchisee assets through encroachment (a franchisor that opens, moves or franchises a unit at the edge of the existing area of another franchisee reduces the value of that existing franchisee's asset);

 

2. restraining trade by restricted the franchisees' ability to use local suppliers; (a franchisor that operates an exclusive distribution system reduces the profits of franchisees by charging uncompetitive prices);

 

3. refusing to be accountable in franchisors' use of franchisees' advertising funds (a franchisor that refuses to be accountable to franchisees for marketing fund expenditures may use money in an unfair way that reduces the value of these funds to franchisees).

Thank you.

Kind regards,

Joseph Manuszak
President
L. B. Zak, Ltd.
P. O. Box 141036
Grand Rapids, MI
49514-1036