80 FR 19663 - TES Franchising, LLC; Analysis of Proposed Consent Order To Aid Public Comment

FEDERAL TRADE COMMISSION

Federal Register Volume 80, Issue 70 (April 13, 2015)

Page Range		19663-19665
FR Document		2015-08385

The consent agreement in this matter settles alleged violations of federal law prohibiting unfair or deceptive acts or practices. The attached Analysis to Aid Public Comment describes both the allegations in the draft complaint and the terms of the consent order--embodied in the consent agreement--that would settle these allegations.

Federal Register, Volume 80 Issue 70 (Monday, April 13, 2015)

[Federal Register Volume 80, Number 70 (Monday, April 13, 2015)]
[Notices]
[Pages 19663-19665]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2015-08385]

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FEDERAL TRADE COMMISSION

[File No. 152 3015]

TES Franchising, LLC; Analysis of Proposed Consent Order To Aid
Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

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SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair or deceptive acts or
practices. The attached Analysis to Aid Public Comment describes both
the allegations in the draft complaint and the terms of the consent
order--embodied in the consent agreement--that would settle these
allegations.

DATES: Comments must be received on or before May 7, 2015.

ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/tesfranchisingconsent online or on
paper, by following the instructions in the Request for Comment part of
the SUPPLEMENTARY INFORMATION section below. Write ``TES Franchising,
LLC, Consent Agreement; File No. 1523015'' on your comment and file
your comment online at https://ftcpublic.commentworks.com/ftc/tesfranchisingconsent by following the instructions on the web-based
form. If you prefer to file your comment on paper, write ``TES
Franchising, LLC, Consent Agreement; File No. 1523015'' on your comment
and on the envelope, and mail your comment to the following address:
Federal Trade Commission, Office of the Secretary, 600 Pennsylvania
Avenue NW., Suite CC-5610 (Annex D), Washington, DC 20580, or deliver
your comment to the following address: Federal Trade Commission, Office
of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor,
Suite 5610 (Annex D), Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT: Jessica Lyon, Bureau of Consumer
Protection, (202) 326-2344, 600 Pennsylvania Avenue NW., Washington, DC
20580.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34,
notice is hereby given that the above-captioned consent agreement
containing consent order to cease and desist, having been filed with
and accepted, subject to final approval, by the Commission, has been
placed on the public record for a period of thirty (30) days. The
following Analysis to Aid Public Comment describes the terms of the
consent agreement, and the allegations in the complaint. An electronic
copy of the full text of the consent agreement package can be obtained
from the FTC Home Page (for April 7, 2015), on the World Wide Web at:
http://www.ftc.gov/os/actions.shtm.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before May 7, 2015.
Write ``TES Franchising, LLC, Consent Agreement; File No. 1523015'' on
your comment. Your comment--including your name and your state--will be
placed on the public record of this proceeding, including, to the
extent practicable, on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the
Commission tries to remove individuals' home contact information from
comments before placing them on the Commission Web site.
Because your comment will be made public, you are solely
responsible for making sure that your comment does not include any
sensitive personal information, like anyone's Social Security number,
date of birth, driver's license number or other state identification
number or foreign country equivalent, passport number, financial
account number, or credit or debit card number. You are also solely
responsible for making sure that your comment does not include any
sensitive health information, like medical records or other
individually identifiable health information. In addition, do not
include any ``[t]rade secret or any commercial or financial information
which . . . is privileged or confidential,'' as discussed in Section
6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR
4.10(a)(2). In particular, do not include competitively sensitive
information such as costs, sales statistics, inventories, formulas,
patterns, devices, manufacturing processes, or customer names.
If you want the Commission to give your comment confidential
treatment, you must file it in paper form, with a request for
confidential treatment, and you have to follow the procedure explained
in FTC Rule 4.9(c), 16 CFR

[[Page 19664]]

4.9(c).\1\ Your comment will be kept confidential only if the FTC
General Counsel, in his or her sole discretion, grants your request in
accordance with the law and the public interest.
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\1\ In particular, the written request for confidential
treatment that accompanies the comment must include the factual and
legal basis for the request, and must identify the specific portions
of the comment to be withheld from the public record. See FTC Rule
4.9(c), 16 CFR 4.9(c).
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Postal mail addressed to the Commission is subject to delay due to
heightened security screening. As a result, we encourage you to submit
your comments online. To make sure that the Commission considers your
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/tesfranchisingconsent by following the instructions on the web-
based form. If this Notice appears at http://www.regulations.gov/#!home, you also may file a comment through that Web site.
If you file your comment on paper, write ``TES Franchising, LLC,
Consent Agreement; File No. 1523015'' on your comment and on the
envelope, and mail your comment to the following address: Federal Trade
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite
CC-5610 (Annex D), Washington, DC 20580, or deliver your comment to the
following address: Federal Trade Commission, Office of the Secretary,
Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex
D), Washington, DC 20024. If possible, submit your paper comment to the
Commission by courier or overnight service.
Visit the Commission Web site at http://www.ftc.gov to read this
Notice and the news release describing it. The FTC Act and other laws
that the Commission administers permit the collection of public
comments to consider and use in this proceeding as appropriate. The
Commission will consider all timely and responsive public comments that
it receives on or before May 7, 2015. You can find more information,
including routine uses permitted by the Privacy Act, in the
Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

Analysis of Proposed Consent Order To Aid Public Comment

The Federal Trade Commission (``FTC'' or ``Commission'') has
accepted, subject to final approval, a consent agreement applicable to
TES Franchising, LLC (``TES'').
The proposed consent order has been placed on the public record for
thirty (30) days for receipt of comments by interested persons.
Comments received during this period will become part of the public
record. After thirty (30) days, the Commission will again review the
agreement and the comments received, and will decide whether it should
withdraw from the agreement and take appropriate action or make final
the agreement's proposed order.
This matter concerns alleged false or misleading representations
that TES made to consumers concerning its participation in the Safe
Harbor privacy frameworks agreed upon by the U.S. and the European
Union and the U.S. and Switzerland (collectively, ``Safe Harbor
Frameworks'') and concerning the handling of consumer disputes relating
to the Safe Harbor Frameworks. The proposed complaint also alleges that
TES made false or misleading representations to the effect that it was
a current licensee of the TRUSTe self-regulatory program.
The Safe Harbor Frameworks allow U.S. companies to transfer data
outside the EU and Switzerland consistent with European law. To join
the Safe Harbor Frameworks, a company must self-certify to the U.S.
Department of Commerce (``Commerce'') that it complies with a set of
principles and related requirements that have been deemed by the
European Commission and Switzerland as providing ``adequate'' privacy
protection. These principles include notice, choice, onward transfer,
security, data integrity, access, and enforcement. Among other things,
the enforcement principle requires companies to provide a readily
available and affordable independent recourse mechanism to investigate
and resolve an individual's complaints and disputes. Commerce maintains
a public Web site, www.export.gov/safeharbor, where it posts the names
of companies that have self-certified to the Safe Harbor Frameworks.
The listing of companies indicates whether their self-certification is
``current'' or ``not current.'' Companies are required to re-certify
every year in order to retain their status as ``current'' members of
the Safe Harbor Frameworks.
TES provides business coaching services to franchisees. According
to the Commission's complaint, TES has set forth on its Web site,
www.entrepreneursource.com, privacy policies and statements about its
practices, including (1) statements related to its participation in the
Safe Harbor Frameworks and (2) statements indicating that it is a
licensee of the TRUSTe Privacy Program.
The Commission's complaint alleges that from March 2013 until
February 2015 TES falsely represented that it was a ``current''
participant in the Safe Harbor Frameworks when, in fact, the company's
self-certifications had lapsed. The Commission's complaint also alleges
that during this same time period TES represented that all Safe Harbor-
related disputes would be settled by an ``arbitration administered
agency'' such as the American Arbitration Association, that hearings
would take place in Connecticut, and that the costs of arbitration
would be shared equally by the parties. In fact, the independent
recourse mechanism authorized under TES's Safe Harbor certification was
the European data protection authorities, which resolve Safe Harbor-
related disputes at no cost to consumers and do not require in-person
hearings. The Commission's complaint alleges that these false
representations are likely to deter EU and Swiss citizens from
attempting to take advantage of the dispute resolution services offered
by the company.
The Commission's complaint further alleges that until February
2015, TES represented through statements in its online privacy policy
that it was a current licensee of the TRUSTe Privacy Program, when, in
fact, it was not a current licensee.
Part I of the proposed order prohibits TES from making
misrepresentations about its membership in any privacy or security
program sponsored by the government or any other self-regulatory or
standard-setting organization, including, but not limited to, the U.S.-
EU Safe Harbor Framework, the U.S.-Swiss Safe Harbor Framework, and the
TRUSTe privacy programs. Part II of the proposed order also prohibits
TES from misrepresenting in any manner, its participation in, or the
rules, processes, policies, or costs of, any alternative dispute
resolution process or service, including but not limited to,
arbitration, mediation, or other independent recourse mechanism.
Parts III through VII of the proposed order are reporting and
compliance provisions. Part III requires TES to retain documents
relating to its compliance with the order for a five-year period. Part
IV requires dissemination of the order now and in the future to persons
with responsibilities relating to the subject matter of the order. Part
V ensures notification to the FTC of changes in corporate status. Part
VI mandates that TES submit an initial compliance report to the FTC,
and make available to the FTC subsequent reports. Part VII is a
provision ``sunsetting'' the order after twenty (20) years, with
certain exceptions.
The purpose of this analysis is to facilitate public comment on the

[[Page 19665]]

proposed order. It is not intended to constitute an official
interpretation of the proposed complaint or order or to modify the
order's terms in any way.

By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2015-08385 Filed 4-10-15; 8:45 am]
BILLING CODE 4910-13-P

19664 Federal Register / Vol. 80, No. 70 / Monday, April 13, 2015 / Notices

4.9(c).1 Your comment will be kept during this period will become part of Harbor Frameworks when, in fact, the
confidential only if the FTC General the public record. After thirty (30) days, company’s self-certifications had
Counsel, in his or her sole discretion, the Commission will again review the lapsed. The Commission’s complaint
grants your request in accordance with agreement and the comments received, also alleges that during this same time
the law and the public interest. and will decide whether it should period TES represented that all Safe
Postal mail addressed to the withdraw from the agreement and take Harbor-related disputes would be
Commission is subject to delay due to appropriate action or make final the settled by an ‘‘arbitration administered
heightened security screening. As a agreement’s proposed order. agency’’ such as the American
result, we encourage you to submit your This matter concerns alleged false or Arbitration Association, that hearings
comments online. To make sure that the misleading representations that TES would take place in Connecticut, and
Commission considers your online made to consumers concerning its that the costs of arbitration would be
comment, you must file it at https:// participation in the Safe Harbor privacy shared equally by the parties. In fact, the
ftcpublic.commentworks.com/ftc/ frameworks agreed upon by the U.S. and independent recourse mechanism
tesfranchisingconsent by following the the European Union and the U.S. and authorized under TES’s Safe Harbor
instructions on the web-based form. If Switzerland (collectively, ‘‘Safe Harbor certification was the European data
this Notice appears at http:// Frameworks’’) and concerning the protection authorities, which resolve
www.regulations.gov/#!home, you also handling of consumer disputes relating Safe Harbor-related disputes at no cost
may file a comment through that Web to the Safe Harbor Frameworks. The to consumers and do not require in-
site. proposed complaint also alleges that person hearings. The Commission’s
If you file your comment on paper, TES made false or misleading complaint alleges that these false
write ‘‘TES Franchising, LLC, Consent representations to the effect that it was representations are likely to deter EU
Agreement; File No. 1523015’’ on your a current licensee of the TRUSTe self- and Swiss citizens from attempting to
comment and on the envelope, and mail regulatory program. take advantage of the dispute resolution
your comment to the following address: The Safe Harbor Frameworks allow services offered by the company.
Federal Trade Commission, Office of the U.S. companies to transfer data outside The Commission’s complaint further
Secretary, 600 Pennsylvania Avenue the EU and Switzerland consistent with alleges that until February 2015, TES
NW., Suite CC–5610 (Annex D), European law. To join the Safe Harbor represented through statements in its
Washington, DC 20580, or deliver your Frameworks, a company must self- online privacy policy that it was a
comment to the following address: certify to the U.S. Department of current licensee of the TRUSTe Privacy
Federal Trade Commission, Office of the Commerce (‘‘Commerce’’) that it Program, when, in fact, it was not a
Secretary, Constitution Center, 400 7th complies with a set of principles and current licensee.
Street SW., 5th Floor, Suite 5610 related requirements that have been Part I of the proposed order prohibits
(Annex D), Washington, DC 20024. If deemed by the European Commission TES from making misrepresentations
possible, submit your paper comment to and Switzerland as providing about its membership in any privacy or
the Commission by courier or overnight ‘‘adequate’’ privacy protection. These security program sponsored by the
service. principles include notice, choice, government or any other self-regulatory
Visit the Commission Web site at onward transfer, security, data integrity, or standard-setting organization,
http://www.ftc.gov to read this Notice access, and enforcement. Among other including, but not limited to, the U.S.-
and the news release describing it. The things, the enforcement principle EU Safe Harbor Framework, the U.S.-
FTC Act and other laws that the requires companies to provide a readily Swiss Safe Harbor Framework, and the
Commission administers permit the available and affordable independent TRUSTe privacy programs. Part II of the
collection of public comments to recourse mechanism to investigate and proposed order also prohibits TES from
consider and use in this proceeding as resolve an individual’s complaints and misrepresenting in any manner, its
appropriate. The Commission will disputes. Commerce maintains a public participation in, or the rules, processes,
consider all timely and responsive Web site, www.export.gov/safeharbor, policies, or costs of, any alternative
public comments that it receives on or where it posts the names of companies dispute resolution process or service,
before May 7, 2015. You can find more that have self-certified to the Safe including but not limited to, arbitration,
information, including routine uses Harbor Frameworks. The listing of mediation, or other independent
permitted by the Privacy Act, in the companies indicates whether their self- recourse mechanism.
Commission’s privacy policy, at http:// certification is ‘‘current’’ or ‘‘not Parts III through VII of the proposed
www.ftc.gov/ftc/privacy.htm. current.’’ Companies are required to re- order are reporting and compliance
certify every year in order to retain their provisions. Part III requires TES to
Analysis of Proposed Consent Order To status as ‘‘current’’ members of the Safe retain documents relating to its
Aid Public Comment Harbor Frameworks. compliance with the order for a five-
The Federal Trade Commission TES provides business coaching year period. Part IV requires
(‘‘FTC’’ or ‘‘Commission’’) has accepted, services to franchisees. According to the dissemination of the order now and in
subject to final approval, a consent Commission’s complaint, TES has set the future to persons with
agreement applicable to TES forth on its Web site, responsibilities relating to the subject
Franchising, LLC (‘‘TES’’). www.entrepreneursource.com, privacy matter of the order. Part V ensures
The proposed consent order has been policies and statements about its notification to the FTC of changes in
placed on the public record for thirty practices, including (1) statements corporate status. Part VI mandates that
mstockstill on DSK4VPTVN1PROD with NOTICES

(30) days for receipt of comments by related to its participation in the Safe TES submit an initial compliance report
interested persons. Comments received Harbor Frameworks and (2) statements to the FTC, and make available to the
indicating that it is a licensee of the FTC subsequent reports. Part VII is a
1 In particular, the written request for confidential
TRUSTe Privacy Program. provision ‘‘sunsetting’’ the order after
treatment that accompanies the comment must The Commission’s complaint alleges twenty (20) years, with certain
include the factual and legal basis for the request,
and must identify the specific portions of the
that from March 2013 until February exceptions.
comment to be withheld from the public record. See 2015 TES falsely represented that it was The purpose of this analysis is to
FTC Rule 4.9(c), 16 CFR 4.9(c). a ‘‘current’’ participant in the Safe facilitate public comment on the

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Document Created: 2015-12-18 11:22:16
Document Modified: 2015-12-18 11:22:16

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
Action		Proposed Consent Agreement.
Dates		Comments must be received on or before May 7, 2015.
Contact		Jessica Lyon, Bureau of Consumer Protection, (202) 326-2344, 600 Pennsylvania Avenue NW., Washington, DC 20580.
FR Citation		80 FR 19663