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Franchise Litigation and Florida’s “Little FTC Act”

While we have discussed the basics of franchise law in a prior post, it is important to talk about some of the common issues that cause franchise litigation. Understanding some of these concepts may be the key to prevention of costly litigation or a source of information for pending litigation. In the event that you find yourself in the midst of franchise litigation, contact an experienced attorney for assistance.

Florida’s Deceptive and Unfair Trade Practices Act

For those considering franchise litigation, it is necessary to understand possible violations of unfair trade practices statutes. These statutes are often called “Little Federal Trade Commission (FTC) Acts.” In Florida, we have unfair trade practice laws that allow those who qualify as consumers to bring private actions for unfair trade practices. This provides protection to consumers by prohibiting unfair competition methods or deceptive or unfair acts while conducting trade or commerce.

The statute states that any violation of the federal FTC Act (which includes the FTC Franchise Rule) is an automatic violation of Florida’s “Little FTC Act.” What makes Florida’s Little FTC Act relevant here is that even a business that is also a consumer of goods, services, etc. or other things of value can also bring a claim.

Florida’s “Little FTC Act” limits damages for successful plaintiffs to “actual damages” and attorney fees in some situations. Further remedies are possible for state enforcement authorities who can bring suit on behalf of consumers.

Violations of Florida’s “Little FTC Act”

Determining what actions can be considered unfair or deceptive is up to the courts. This is an area that causes a bit of confusion and frustration for that reason. While Florida courts do not require that an unfair practice be deceptive, the two are often tied together in successful actions. Despite this confusion, there are guidelines that determine how a plaintiff can prove that a practice is unfair or deceptive (or both).

Florida’s “Little FTC Act” simply states that “due consideration and great weight shall be given to the interpretations of the Federal Trade Commission and the federal courts.” Although there is no concrete definition, you are able to determine whether you have suffered damages while executing your franchise agreement. Furthermore, it is important to investigate if you feel that one of the franchisor’s practices are problematic and are causing the damages you have experienced. In the event that you feel that your franchisor has caused damages to you as a result of practices you believe were unfair or possibly deceptive, you should speak to an attorney. A legal professional is able to filter through the shades of gray that often shield the litigation process from individuals and businesses who need access to it.

The rules that govern franchise law and the franchise agreement that governs the franchisee and franchisor relationship are all very complex. Navigating these rules alone can cause more problems during litigation and can make the process for time consuming. The West Palm Beach attorneys at Pike & Lustig, LLP have the knowledge and skills to help you through this process. Our Florida attorneys can work with you and provide you with the information and legal advice you need to successfully litigate a franchise dispute.

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