Business Articles

lunedì 21 marzo 2011

Required Disclosure to Foreign Investors

At one point the Federal Trade Commission had considered that United States based franchisors were to provide franchise disclosures to the potential buyers of foreign countries. This of course is problematic since it is widely known that foreign based companies often steal us trade secrets and copy products and business methods. The Federal Trade Commission agrees which is interesting because most government agencies
are calling for additional transparency, which is allowing our foreign competitors. It is almost as if US government agencies are purposely trying to kill our country.
I agree with the Federal Trade Commission's Franchise Groups take on this subject and believe no excessive disclosure be given to foreign franchise buyers as it would be used against American Franchisors. And to that point the huge 200 plus page franchise disclosure given to US consumers is also problematic because a US based friend could ask for one and then give it to a foreign national. But if such a requirement to send these disclosure documents out of the country was required it would kill franchising and only add to the trade deficit, restricting in country money flows, which we need here in the States to make up for problems right now in our deflated dollar strategy as we increase interest rates.
The Franchising Industry if it is allowed to flourish makes for a great exporting strategy, but we must not kill the up and coming franchise companies who will be coming up with these new innovations and inventions, or prevent existing companies to use the franchising model as a method to grow and export our products. The Federal Trade Commission makes some good points on page 74 of the latest franchise report to illustrate the point of hardship for franchisors if this were to be required.

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