The IFA Is Fighting the FTC's New Franchise Protections — Here's What That Tells You
The International Franchise Association has mounted an aggressive lobbying campaign against the FTC's proposed Franchise Rule amendments. Understanding who the IFA represents — and who it does not — is essential context for every franchise buyer.
When the Federal Trade Commission announced its proposed amendments to the Franchise Rule in 2023, the International Franchise Association responded with one of the most aggressive lobbying campaigns in its history — filing detailed public comments, mobilizing member companies, and engaging congressional allies to oppose the changes.
The IFA's opposition was framed as protecting the franchise industry from regulatory overreach. But a closer look at who the IFA represents — and what specific protections it is opposing — reveals a more complicated picture.
Sources: International Franchise Association, public comment filings, FTC Docket No. FTC-2023-0026 (2023); Politico, "Franchise Industry Fights Back Against FTC Rule Changes" (2024); IFA membership data and annual reports.
Who the IFA Actually Represents
The International Franchise Association was founded in 1960 and describes itself as "the world's oldest and largest organization representing franchising worldwide." Its membership includes franchisors, franchisees, and franchise suppliers.
But the IFA's membership composition and governance structure tell a more specific story.
According to the IFA's own membership data, the organization's membership is approximately:
- Franchisors: the majority of dues-paying members and the dominant voice in governance
- Franchise suppliers: attorneys, consultants, lenders, and technology providers who serve franchisors
- Franchisees: a smaller minority of members, with limited representation in leadership
The IFA's board of directors is composed primarily of franchisor executives. Its policy positions consistently align with franchisor interests on issues where franchisor and franchisee interests diverge — including earnings disclosure, termination rights, and encroachment.
This is not a criticism of the IFA's right to advocate for its members. It is context that franchise buyers need to understand when evaluating the IFA's policy positions.
What the IFA Is Opposing — And Why It Matters
The IFA's public comments on the FTC's proposed Franchise Rule amendments opposed several specific changes that would directly benefit franchise buyers.
1. Mandatory Earnings Disclosure
The FTC proposed requiring franchisors to provide standardized earnings data in Item 19. Currently, Item 19 is optional — only about 50% of franchisors include it.
The IFA's position: Mandatory earnings disclosure would be burdensome for franchisors and could expose them to liability for projections that do not materialize.
What this means for buyers: If the IFA's position prevails, you will continue to have no legal right to earnings data before signing a franchise agreement. You will continue to be dependent on voluntary disclosure — which means the franchisors with the weakest earnings data have the least incentive to disclose it.
2. Renewal Term Protections
The FTC proposed requiring clearer disclosure of renewal terms, including any material changes that franchisors may impose at renewal.
The IFA's position: Franchisors need flexibility to update their systems and require franchisees to adopt new standards at renewal.
What this means for buyers: If the IFA's position prevails, franchisors will retain broad authority to change the terms of your agreement at renewal — including increasing royalties, requiring costly renovations, or reducing your territory — with limited disclosure requirements.
3. Electronic Delivery Modernization
The FTC proposed updating the rule to reflect how FDDs are actually delivered and stored in the digital age.
The IFA's position: The existing rule is adequate and modernization is unnecessary.
What this means for buyers: This is the least consequential of the IFA's positions, but it reflects a pattern of opposing any change to the existing regulatory framework.
The Franchisee Advocacy Response
Franchisee advocacy organizations have taken the opposite position from the IFA on virtually every proposed change.
The American Association of Franchisees and Dealers (AAFD), the Coalition of Franchisee Associations (CFA), and multiple system-specific franchisee associations filed public comments supporting the FTC's proposed amendments and, in many cases, urging the FTC to go further.
The franchisee advocates argued that:
- The existing rule was written in 2007 and does not reflect the current franchise landscape
- Earnings misrepresentation is a pervasive problem that mandatory Item 19 disclosure would address
- Renewal term protections are necessary to prevent franchisors from using renewal as a mechanism to extract additional value from successful franchisees
The divergence between the IFA's positions and the franchisee advocates' positions is itself informative. On every issue where franchisor and franchisee interests diverge, the IFA sides with franchisors.
The Congressional Dimension
The IFA's lobbying campaign extended beyond the FTC to Congress. The organization engaged members of the House and Senate Small Business Committees, arguing that the proposed rule changes would harm small business owners — a framing that conflates the interests of franchisors (who are often large corporations) with the interests of franchisees (who are often genuinely small business owners).
Several members of Congress sent letters to the FTC urging it to slow down or abandon the rulemaking process. The IFA's political action committee is one of the most active in the food service and retail sectors.
What This Means for Franchise Buyers
The IFA's lobbying campaign is a reminder that the franchise industry's most prominent advocacy organization does not primarily represent your interests as a buyer.
This does not mean the franchise model is bad. It means that the regulatory framework governing franchise sales is shaped by organizations whose primary constituency is franchisors — and that buyers need to do their own due diligence rather than relying on industry-produced materials.
Practical implications:
- Do not rely on IFA-produced buyer guides. They are useful for understanding the industry, but they are produced by an organization that represents franchisors.
- Seek out franchisee advocacy resources. The AAFD, CFA, and system-specific franchisee associations provide a different perspective.
- Hire a franchisee-side attorney. Not a broker who earns a commission on your purchase, and not an attorney who primarily represents franchisors.
- Use AI analysis tools. FDD Score™ analyzes your FDD objectively — it does not have a financial interest in whether you sign.
- Follow the FTC rulemaking. The proposed amendments are not yet final. Monitoring the rulemaking process will tell you what protections you may gain — or not gain — in the coming years.
The franchise industry is a $800 billion sector that employs millions of Americans. It works well for many buyers. But it works best for buyers who understand the regulatory landscape and do their own due diligence — rather than relying on an industry that has a financial interest in their signing.
Sources: International Franchise Association public comment filings, FTC Docket No. FTC-2023-0026 (2023); Politico (2024); IFA Annual Report 2023; American Association of Franchisees and Dealers (AAFD) public comment filings; Coalition of Franchisee Associations (CFA) public comment filings.
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