Frank F&B, operator of the handcrafted burger franchise Frank Burger, was fined for partaking in unfair practices towards its franchisees, the antitrust regulator stated Sunday.
The Truthful Commerce Fee (FTC) stated it imposed a fantastic of 641 million received ($448,032), together with corrective actions, for the corporate’s violations of the Franchise Enterprise Act.
The corporate is accused of distributing franchise brochures containing false or exaggerated projected earnings to potential franchisees for a few yr from January 2021.
It additionally allegedly pressured franchisees to buy 13 gadgets, together with forks and knives, completely from the headquarters, despite the fact that these weren’t obligatory for sustaining product high quality. Because of this, the agency earned additional franchise charges of round 140 million received.
Moreover, the FTC discovered that after launching a brand new menu in Could 2023, Frank Burger ran promotional occasions offering items however didn’t acquire franchisee consent to cowl a part of the prices.
“The measures are meant to help cheap decision-making by potential franchisees, forestall financial hurt and assist set up a good and clear franchise market,” the regulator stated.
