[Federal Register Volume 60, Number 197 (Thursday, October 12, 1995)]
[Notices]
[Pages 53186-53188]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-25295]
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FEDERAL TRADE COMMISSION
[File No. 932-3219]
Blenheim Expositions, Inc.; Consent Agreement With Analysis To
Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Consent agreement.
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SUMMARY: In settlement of alleged violations of federal law prohibiting
unfair acts and practices and unfair methods of competition, this
consent agreement, accepted subject to final Commission approval,
would, among other things, prohibit a Winter Park, Florida-based
producer of franchise trade shows and expositions from misrepresenting
survey results or making unsubstantiated earnings and success rate
claims in promoting and advertising franchise shows.
DATES: Comments must be received on or before December 11, 1995.
ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,
Room 159, 6th St. and Pa. Ave., NW., Washington, DC 20580.
FOR FURTHER INFORMATION CONTACT:
Tom Cohn, Bureau of Consumer Protection, Federal Trade Commission, H-
238, 6th Street & Pennsylvania Ave., NW., Washington, DC 20580. (202)
326-3532.
SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46, and Section 2.34 of
the Commission's Rules of Practice (16 CFR 2.34), notice is hereby
given that the following consent agreement containing a consent order
to cease and desist, having been filed with and accepted, subject to
final approval, by the Commission, has been placed on the public record
for a period of sixty (60) days. Public comment is invited. Such
comments or views will be considered by the Commission and will be
available for inspection and copying at its principal office in
accordance with Sec. 4.9(b)(6)(ii) of the Commission's Rules of
Practice (16 CFR 4.9(b)(6)(ii)).
Agreement Containing Consent Order To Cease and Desist
In the Matter of Blenheim Expositions, Inc. a corporation.
The Federal Trade Commission having initiated an investigation of
certain acts and practices of Blenheim Expositions, Inc., a
corporation, and it now appearing that Blenheim Expositions, Inc., a
corporation, hereinafter sometimes referred to as proposed respondent,
is willing to enter into an agreement containing an order to cease and
desist from the use of the acts and practices being investigated,
It is hereby agreed by and between Blenheim Expositions, Inc., by
its duly authorized officer; the attorneys for the aforementioned
party; and counsel for the Federal Trade Commission, that:
1. Proposed respondent Blenheim Expositions, Inc. is a corporation
organized, existing and doing business under and by virtue of the laws
of the State of Florida, with its office and principal place of
business located at 1133 Louisiana Avenue, Suite 210, in the City of
Winter Park, State of Florida.
2. Proposed respondent admits all the jurisdictional facts set
forth in the draft of complaint here attached.
3. Proposed respondent waives:
(a) Any further procedural steps;
(b) The requirement that the Commission's decision contain a
statement of findings of fact and conclusions of law; and
(c) All rights to seek judicial review or otherwise to challenge or
contest the validity of the order entered pursuant to this agreement.
4. This agreement shall not become part of the public record of the
proceeding unless and until it is accepted by the Commission. If this
agreement is accepted by the Commission it, together with the draft of
complaint contemplated thereby, will be placed on the public record for
a period of sixty (60) days and information in respect thereto publicly
released. The Commission thereafter may either withdraw its acceptance
of this agreement and so notify the proposed respondent, in which event
it will take such action as it may consider appropriate, or issue and
serve its complaint (in such form as the circumstances may require) and
decision, in disposition of the proceeding.
5. This agreement is for settlement purposes only and does not
constitute an admission by proposed respondent of facts, other than
jurisdictional facts, or of violations of law as alleged in the draft
of compliant here attached.
6. This agreement contemplates that, if it is accepted by the
Commission, and if such acceptance is not subsequently withdrawn by the
Commission pursuant to the provisions of Sec. 2.34 of the Commission's
Rules, the Commission may, without further notice to proposed
respondent, (1) issue its complaint corresponding in form and substance
with the draft of complaint here attached and its decision containing
the following order to cease and desist in disposition of the
proceeding and (2) make information public in respect thereto. When so
entered, the order to cease and desist shall have the same force and
effect and may be altered, modified or set aside in the same manner and
within the same time provided by statute for other orders. The order
shall become final upon service. Delivery by the U.S. Postal Service of
the complaint and decision containing the agreed-to order to proposed
respondent's address as stated in this agreement shall constitute
service. Proposed respondent waives any right it may have to any other
manner of service. The complaint may be used in construing the terms of
the order, and no agreement, understanding, representation, or
interpretation not contained in the order or the agreement may be used
to vary or contradict the terms of the order.
7. Proposed respondent has read the proposed complaint and order
contemplated hereby. It understands that once the order has been
issued, it will be required to file one or more compliance reports
showing that it has fully complied with the order. Proposed respondent
further understands that it may be liable for civil penalties in the
amount provided by law for each violation of the order after it becomes
final.
Order
I
It is ordered That respondent, Blenheim Expositions, Inc., a
corporation, its successors and assigns, and its officers; and
respondent's agents, representatives and employees, directly or through
any corporation, subsidiary, affiliate, division or other device, in
connection with the advertising, promotion, or marketing of franchise
shows in or affecting commerce, as ``commerce'' is defined in the
Federal Trade Commission Act, do forthwith cease and desist from
misrepresenting, in any manner, directly or by implication, the
existence, purpose, sample, contents, validity, results, conclusions or
interpretations of any survey, poll, test, report or study.
II
It is further ordered That respondent, Blenheim Expositions, Inc.,
a corporation, its successors and assigns, and its officers; and
respondent's agents,
[[Page 53187]]
representatives and employees, directly or through any corporation,
subsidiary, affiliate, division or other device, in connection with the
advertising, promotion, marketing, or conducting of franchise shows in
or affecting commerce, as ``commerce'' is defined in the Federal Trade
Commission Act, do forthwith cease and desist from representing in any
manner, directly or by implication:
A. The sales, income, or profits that current or prospective
franchise owners have earned or can or will earn; or
B. The chances of success or success rates that franchise owners
have enjoyed or can or will enjoy,
unless, at the time of making such representation, respondent possesses
and relies upon competent and reliable evidence, which when appropriate
must be competent and reliable scientific evidence, that substantiates
the representation. For purposes of this Order, ``competent and
reliable scientific evidence'' shall mean analyses, research, surveys,
polls, reports, studies or other evidence based on the expertise of
professionals in the relevant area, that have been conducted and
evaluated in an objective manner by persons qualified to do so, using
procedures generally accepted in the profession to yield accurate and
reliable results.
III
It is further ordered That respondent, Blenheim Expositions, Inc.,
a corporation, its successors and assigns, and its officers, for a
period of five (5) years after the date of entry of this Order, shall
distribute, at each franchise show it promotes, directly or through any
corporation, subsidiary, affiliate, division or other device, to at
least 500 persons attending such show, or to each person attending such
show if the total number of such persons is fewer than 500, a brochure
entitled, ``A Consumer Guide To Buying A Franchise,'' provided to the
respondent by the Federal Trade Commission. The Commission shall
provide to the respondent one camera-ready copy of the brochure, and
the respondent is responsible for the printing, and printing costs, of
the brochure for distribution at the franchise shows. The brochures
distributed by respondent pursuant to this paragraph shall be
reproduced in a format substantially similar to the original format, as
provided by the Federal Trade Commission; provided, however, that
reproduction in a black and white format shall be deemed substantially
similar to the original for purposes of this paragraph. Respondent may
revise the text of said brochure or substitute another similar document
only after submitting said revision or substitution to staff of the
Commission, and receiving written approval thereof.
IV
It is further ordered That respondent, Blenheim Expositions, Inc.,
a corporation, its successors and assigns, and its officers, shall:
A. For a period of five (5) years after the date of the last
dissemination by or on behalf of the respondent of any representation
covered by this Order, maintain and upon request make available to the
Federal Trade Commission or its staff for inspection and copying:
1. All advertisements and promotional materials setting forth such
representation;
2. All polls, surveys, reports, studies, or other documents and
materials relied upon by the respondent to substantiate such
representation; and
3. All polls, surveys, reports, studies, or other documents and
materials (such as correspondence) in the respondent's possession or
control that contradict, qualify, or call into question such
representation or the basis upon which the respondent relied for such
representation;
B. For a period of five (5) years after the date of their creation,
maintain and upon request make available to the Federal Trade
Commission or its staff for inspection and copying such other documents
and materials as shall demonstrate full compliance with this Order.
V
It is further ordered That, within thirty (30) days after service
of this Order upon it, respondent, Blenheim Expositions, Inc., its
successors and assigns shall distribute a copy of this Order to each of
its operating divisions and to each of its officers, agents,
representatives, or employees engaged in the preparation or placement
of advertisements, promotional materials, or other such sales materials
covered by this Order.
VI
It is further ordered That respondent, Blenheim Expositions, Inc.,
its successors and assigns shall notify the Commission at least thirty
(30) days prior to any proposed change in said corporation such as a
dissolution, assignment, or sale resulting in the emergence of a
successor corporation, the creation or dissolution of subsidiaries, or
any other change in the corporation which may affect compliance
obligations under this Order.
VII
It is further ordered That this order will terminate twenty years
from the date of its issuance, or twenty years from the most recent
date that the United States or the Federal Trade Commission files a
complaint (with or without an accompanying consent decree) in federal
court alleging any violation of the order, whichever comes later;
provided, however, that the filing of such a compliant will not affect
the duration of:
A. Any paragraph in this order that terminates in less than twenty
years;
B. This order's application to any respondent that is not named as
a defendant in such compliant; and
C. This order if such compliant is filed after the order has
terminated pursuant to this paragraph.
Provided further, that if such complaint is dismissed or a federal
court rules that the respondent did not violate any provision of the
order, and the dismissal or ruling is either not appealed or upheld on
appeal, then the order will terminate according to this paragraph as
though the compliant was never filed, except that the order will not
terminate between the date such complaint is filed and the later of the
deadline for appealing such dismissal or ruling and the date such
dismissal or ruling is upheld on appeal.
VIII
It is further ordered That respondent, Blenheim Expositions, Inc.,
shall, within sixty (60) days after service of this Order upon it, and
at such other times as the Commission may require, file with the
Commission a report, in writing, setting forth in detail the manner and
form in which it has complied with this Order.
Analysis of Proposed Consent Order to Aid Public Comment
The Federal Trade Commission has accepted an agreement to a
proposed consent order from Blenheim Expositions, Inc. (``Blenheim'').
The proposed consent order has been placed on the public record for
sixty (60) days for reception of comments by interested persons.
Comments received during this period will become part of the public
record. After sixty (60) days, the Commission will again review the
agreement and the comments received and will decide whether it should
withdraw from the agreement or make final the agreement's proposed
order.
This matter concerns claims made by Blenheim in its advertising and
[[Page 53188]]
promotional materials for franchise shows.
The Commission's complaint in this matter charges Blenheim with
engaging in unfair or deceptive practices in connection with the
advertising of its franchise shows. According to the complaint,
Blenheim falsely represented that it had a reasonable basis for claims
that franchise owners earn an average income and/or average pre-tax
income of more than $124,000, and that franchise owners earn an average
pre-tax income and/or average pre-tax profit of $124,290.
The complaint also alleges that Blenheim falsely represented that
it had a reasonable basis for claims that a prospective franchise
owner's chances of success are 94%, and that franchise owners enjoy a
94% success rate.
Finally, the complaint alleges that Blenheim falsely represented
that the above representations were proved by a Gallup poll of
franchise owners conducted in 1991.
The consent order contains provisions designed to remedy the
violations charged and to prevent Blenheim from engaging in similar
deceptive and unfair acts and practices in the future.
Part I of the order prohibits Blenheim from misrepresenting the
existence, purpose, sample, contents, validity, results, conclusions or
interpretations of any survey, poll, test, report or study.
Part II of the order prohibits Blenheim from making any claims
about the sales, income, or profits that current or prospective
franchise owners have earned or can or will earn, or the chances of
success or success rates that franchise owners have enjoyed or can or
will enjoy, unless, prior to making such claims, Blenheim has competent
and reliable evidence to substantiate the claims, which when
appropriate must be competent and reliable scientific evidence.
Part III of the order requires Blenheim, for a period of five years
after the date of entry of the order, to distribute at each franchise
show it promotes, a brochure entitled, ``A Consumer Guide to Buying A
Franchise,'' provided to Blenheim by the Commission. Under this
requirement, Blenheim must reproduce the brochure in a format
substantially similar to the original format as provided by the
Commission; is responsible for the printing costs of the brochure; and
must distribute copies of the brochure to at least 500 persons
attending each such show, or to each person attending such show if the
total number of such persons is fewer than 500. Blenheim may revise the
text of the brochure or substitute a similar document only after
submitting said revision or substitution to staff of the Commission and
receiving written approval thereof.
Part IV of the order requires Blenheim to maintain copies of all
advertisements setting forth any representation covered by the order;
all materials relied upon in making any representation covered by the
order; all materials in Blenheim's possession or control that
contradict such representation or the basis upon which Blenheim relied
for it; and any other materials that demonstrate full compliance with
the order.
Part V of the order requires Blenheim to distribute copies of the
order to each of its operating divisions and to each of its various
officers, agents and representatives.
Part VI of the order requires Blenheim to notify the Commission of
any changes in corporate structure that might affect compliance with
the order.
Part VII of the order terminates the order twenty years from the
date of its issuance, or twenty years from the date a complaint is
filed in federal court alleging any violation of the order, whichever
comes later.
Part VIII of the order requires Blenheim to file with the
Commission one or more reports detailing compliance with the order.
The purpose of this analysis is to facilitate public comment on the
proposed order, and it is not intended to constitute an official
interpretation of the agreement and proposed order, or to modify any of
their terms.
Donald S. Clark,
Secretary.
[FR Doc. 95-25295 Filed 10-11-95; 8:45 am]
BILLING CODE 6750-01-M
