Business Opportunity Advertising

Business opportunity advertising (such as advertising franchises, delivery routes, or sales positions) is a form of advertising that is frequently abused by scam-artists. While many of these fraudulent advertisements are pursuable under Pennsylvania ’s Unfair Trade Practices and Consumer Protection Law and various Federal Trade Commission (FTC) regulations, many of the people who place these advertisements defraud innocent consumers out of money and never get caught.

The FTC is asking newspapers “as a matter of policy” to take three steps to educate their readers about business opportunity scams. These three steps are:

  1. Publish one of the four model consumer notices at the top of the newspaper’s business opportunity classified advertisement listing:
    • WANT TO OWN YOUR OWN BUSINESS?
      When it comes to earnings or locations, there are no guarantees! Call the Pennsylvania Attorney General’s Bureau of Consumer Protection at (610) 821-6690 or the Federal Trade Commission at (877) FTC-HELP for free information. Or visit our Web site at www.ftc.gov/bizop.
    • INVESTIGATE BEFORE YOU INVEST
      Always a good policy, especially for business opportunities and franchises. Call the Pennsylvania Attorney General’s Bureau of Consumer Protection at (610) 821-6690 or the Federal Trade Commission at (877) FTC-HELP for free information. Or visit our Web site at www.ftc.gov/bizop.
    • INVESTING?
      Promises of big profits often mean big risk! Call the Pennsylvania Attorney General’s Bureau of Consumer Protection at (610) 821-6690 or the Federal Trade Commission at (877) FTC-HELP for free information. Or visit our Web site at www.ftc.gov/bizop.
    • CHECK OUT ALL EARNINGS CLAIMS
      Take the time to meet prior purchasers of the business opportunity or franchise you are considering. Call the Pennsylvania Attorney General’s Bureau of Consumer Protection at (610) 821-6690 or the Federal Trade Commission at (877) FTC-HELP for free information. Or visit our Web site at www.ftc.gov/bizop.
  2. Substitute generic descriptions for references to well-known brand names in business opportunity advertisements (for example, “snacks” instead of “Frito Lay”), unless the advertiser provides evidence that the brand-name owner has authorized use of the brand name or trademark.
  3. Delete specific dollar figures for sales, income or profits from business opportunity advertisements unless the seller discloses in the advertisement the number and percentage of past purchasers who have made as much as or more than the claim (these disclosures and others must be made at the earlier of the “time for making of disclosures” or the first “personal meeting,” after the person responds to the advertisement (16 CFR §436.1)).

Important note: While these suggestions are voluntary and not binding, it is the policy of PNA that the FTC’s invitation requires newspapers to make choices regarding their internal advertising acceptance policies and newspaper content. The decision to accept or reject the FTC’s invitation appropriately rests with each recipient newspaper. However, if newspapers substitute generic descriptions for references to well-known brand names in business opportunity advertisements or delete specific dollar figures for sales, income or profits from business opportunity advertisements, they may risk potential liability through “re-writing” the business opportunity advertisements. By voluntarily complying with the FTC’s “advertisement modification” suggestions, parties to lawsuits may argue that newspapers, not the advertisers, are responsible for ensuring that the text of the advertisement comply with the law.

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