As Espresso Brew Inc. uses a website to provide downloadable information to prospective franchisees. This electronic information is the equivalent of an offer that must comply with the Federal Trade Commission's Franchise Rule. The Option D is correct.
What is the Franchise Rule about?
The Franchise Rule, as provided by Federal Trade Commission requires that the franchisor offering or selling a franchise located in the United States of America to provide the prospective franchisee with the relevant information about the franchise.
The franchisor must be in breach of the FTC Franchise Rule if it:
- fails to furnish the prospective franchisee the disclosure document fourteen calendar days before the prospective franchisee signs the franchise agreement or makes any payment in connection with the franchise
- modifies the terms and conditions of the franchise agreement without furnishing the prospective franchisee with a copy of the revised franchise agreement at least seven calendar days before the prospective franchisee signs the revised franchise agreement.
- If the prospective franchisee initiated the negotiations that gave rise to the modifications of the franchise agreement the seven-day rule shall not apply
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