81 FR 31500 - Disclosure Requirements and Prohibitions Concerning Franchising

FEDERAL TRADE COMMISSION

Federal Register Volume 81, Issue 97 (May 19, 2016)

Page Range		31500-31501
FR Document		2016-11789

The FTC announces revised monetary thresholds for three exemptions from the Franchise Rule. The FTC is required to adjust the size of the monetary thresholds every fourth year based upon the Consumer Price Index for all urban consumers published by the Department of Labor.

Federal Register, Volume 81 Issue 97 (Thursday, May 19, 2016)

[Federal Register Volume 81, Number 97 (Thursday, May 19, 2016)]
[Rules and Regulations]
[Pages 31500-31501]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-11789]


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FEDERAL TRADE COMMISSION

16 CFR Part 436


Disclosure Requirements and Prohibitions Concerning Franchising

AGENCY: Federal Trade Commission (FTC or Commission).

ACTION: Final rule amendments.

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SUMMARY: The FTC announces revised monetary thresholds for three 
exemptions from the Franchise Rule. The FTC is required to adjust the 
size of the monetary thresholds every fourth year based upon the 
Consumer Price Index for all urban consumers published by the 
Department of Labor.

DATES: This final rule is effective on July 1, 2016.

FOR FURTHER INFORMATION CONTACT: Craig Tregillus, Franchise Rule 
Coordinator, Division of Marketing Practices, FTC, 600 Pennsylvania 
Avenue NW., Washington, DC 20580, (202) 326-2970, [email protected].

SUPPLEMENTARY INFORMATION: The FTC's Trade Regulation Rule entitled 
``Disclosure Requirements and Prohibitions Concerning Franchising'' 
(Franchise Rule or Rule) \1\ provides three exemptions based on a 
monetary threshold: The ``minimum payment exemption,'' \2\ the ``large 
franchise investment exemption'' \3\ and the ``large franchisee 
exemption.'' \4\ The Rule requires the Commission to ``adjust the size 
of the monetary thresholds every fourth year based upon the . . . 
Consumer Price Index for all urban consumers [CPI-U] published by the 
Department of Labor.'' \5\ This requirement, added by the 2007 
amendments to the Rule, took effect on July 1, 2007, so that 
franchisors would have a one-year phase-in period within which to 
comply with the amended Rule's revised disclosure requirements before 
the July 1, 2008, final compliance deadline.\6\
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    \1\ 16 CFR part 436.
    \2\ 16 CFR 436.8(a)(1).
    \3\ 16 CFR 436.8(a)(5)(i).
    \4\ 16 CFR 436.8(a)(5)(ii).
    \5\ 16 CFR 436.8(b).
    \6\ 72 FR 15444 (Mar. 30, 2007).
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    As required by the Rule, the Commission revised the three monetary 
thresholds to reflect inflation in the CPI-U from 2007 through 2011 of 
8.49 percent.\7\ The adjusted thresholds, which took effect on July 1, 
2012, raised the minimum payment exemption from $500 to $540; the large 
franchise investment exemption from $1 million to $1,084,900; and the 
large franchisee exemption from $5 million to $5,424,500.\8\
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    \7\ 77 FR 36149, 36150 (June 18, 2012).
    \8\ Id.
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    We base the exemption monetary thresholds that will take effect on 
July 1, 2016, on the increase in the CPI-U between 2007 and 2015. 
During this period, the annual average value of the Consumer Price 
Index for all urban consumers and all items increased by 14.31 
percent--from an index value of 207.342 to a value of 237.017.\9\ 
Applying the percentage increase to the three monetary thresholds 
increases the thresholds as follows:
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    \9\ Bureau of Labor Statistics, CPI Detailed Report: Data for 
February 2016, Table 24, p. 72, available at http://www.bls.gov/cpi/cpid1602.pdf.

[[Page 31501]]



------------------------------------------------------------------------
                                                          Adjusted  2016
                Exemption                    2007 base       threshold
------------------------------------------------------------------------
Minimum Payment.........................            $500       \10\ $570
Large Franchise Investment..............       1,000,000       1,143,100
Large franchisee........................       5,000,000       5,715,500
------------------------------------------------------------------------

    Because the calculation of these thresholds is purely ministerial 
in nature and implements the Rule's mandatory adjustment mechanism, 
these adjustments are exempt from the rulemaking procedures specified 
in section 18 of the FTC Act.\11\ In addition, the Commission has 
determined that notice and comment are unnecessary under the 
Administrative Procedure Act (APA) for the same reason. The Commission, 
therefore, has omitted notice and comment for good cause as provided by 
section 553(b)(B) of the APA.\12\ For this reason, the requirements of 
the Regulatory Flexibility Act also do not apply.\13\ Accordingly, the 
adjusted thresholds will take effect on July 1, 2016.
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    \10\ The Commission has rounded this figure from $571.55 to $570 
for compliance clarity and simplicity.
    \11\ See 15 U.S.C. 57a(d)(2)(B); 16 CFR 1.15(b) (providing that 
non-substantive amendments to trade regulation rules are exempt from 
the rulemaking procedures of Section 18 of the FTC Act).
    \12\ 5 U.S.C. 553(b)(B) (providing that ``good cause'' exists to 
forego notice and comment when public comment is unnecessary).
    \13\ 5 U.S.C. 603 and 604 (no regulatory flexibility analyses 
required where the APA does not require public comment).
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List of Subjects in 16 CFR Part 436

    Advertising, Business and industry, Franchising, Trade practices.

Rule Amendments

    For the reasons set out in the preamble of this document, the 
Federal Trade Commission amends 16 CFR part 436 as follows:

PART 436--DISCLOSURE REQUIREMENTS AND PROHIBITIONS CONCERNING 
FRANCHISING

0
1. The authority citation for part 436 continues to read as follows:

    Authority: 15 U.S.C. 41-58.


Sec.  436.8  [Amended]

0
2. Amend Sec.  436.8 as follows:
0
a. In paragraph (a)(1), remove ``$540'' and, in its place, add 
``$570'';
0
b. In paragraph (a)(5)(i), remove both references to ``$1,084,900'' 
and, in their place, add ``$1,143,100''; and
0
c. In paragraph (a)(5)(ii), remove ``$5,424,500'' and, in its place, 
add ``$5,715,500''.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2016-11789 Filed 5-18-16; 8:45 am]
BILLING CODE 6750-01-P

31500 Federal Register / Vol. 81, No. 97 / Thursday, May 19, 2016 / Rules and Regulations

Inc.’s TCCA DAO. If approved by the DAO, (2) You must use this service information SUPPLEMENTARY INFORMATION: The FTC’s
the approval must include the DAO- as applicable to do the actions required by Trade Regulation Rule entitled
authorized signature. this AD, unless this AD specifies otherwise.
‘‘Disclosure Requirements and
(3) The following service information was
(k) Retained Credit for Previous Actions, Prohibitions Concerning Franchising’’
approved for IBR on October 20, 2014 (79 FR
With Revised Paragraph Reference 59640, October 3, 2014). (Franchise Rule or Rule) 1 provides three
This paragraph restates paragraph (k) of AD (i) Bombardier Alert Service Bulletin exemptions based on a monetary
2014–20–01, with a revised paragraph A605–28–008, Revision 02, dated July 9, threshold: The ‘‘minimum payment
reference. This paragraph provides credit for 2014. exemption,’’ 2 the ‘‘large franchise
actions required by paragraph (j) of this AD, (ii) Reserved.
if those actions were performed before investment exemption’’ 3 and the ‘‘large
(4) For service information identified in
October 20, 2014 (the effective date of AD this AD, contact Bombardier, Inc., 400 Côte- franchisee exemption.’’ 4 The Rule
2014–20–01), using Bombardier Alert Service Vertu Road West, Dorval, Québec H4S 1Y9, requires the Commission to ‘‘adjust the
Bulletin A605–28–008, Revision 01, dated Canada; telephone 514–855–5000; fax 514– size of the monetary thresholds every
May 28, 2014, which is not incorporated by 855–7401; email thd.crj@ fourth year based upon the . . .
reference in this AD. aero.bombardier.com. Consumer Price Index for all urban
(l) Other FAA AD Provisions (5) You may view this service information
at the FAA, Transport Airplane Directorate,
consumers [CPI–U] published by the
The following provisions also apply to this 1601 Lind Avenue SW., Renton, WA. For Department of Labor.’’ 5 This
AD: information on the availability of this requirement, added by the 2007
(1) Alternative Methods of Compliance material at the FAA, call 425–227–1221. amendments to the Rule, took effect on
(AMOCs): The Manager, New York ACO, (6) You may view this service information
ANE–170, FAA, has the authority to approve July 1, 2007, so that franchisors would
that is incorporated by reference at the have a one-year phase-in period within
AMOCs for this AD, if requested using the National Archives and Records
procedures found in 14 CFR 39.19. In which to comply with the amended
Administration (NARA). For information on
accordance with 14 CFR 39.19, send your Rule’s revised disclosure requirements
the availability of this material at NARA, call
request to your principal inspector or local before the July 1, 2008, final compliance
202–741–6030, or go to: http://
Flight Standards District Office, as
www.archives.gov/federal-register/cfr/ibr- deadline.6
appropriate. If sending information directly
to the ACO, send it to ATTN: Program locations.html. As required by the Rule, the
Manager, Continuing Operational Safety, Issued in Renton, Washington, on May 9, Commission revised the three monetary
FAA, New York ACO, 1600 Stewart Avenue, 2016. thresholds to reflect inflation in the
Suite 410, Westbury, NY 11590; telephone Michael Kaszycki,
516–228–7300; fax 516–794–5531. Before
CPI–U from 2007 through 2011 of 8.49
Acting Manager, Transport Airplane percent.7 The adjusted thresholds,
using any approved AMOC, notify your
appropriate principal inspector, or lacking a Directorate, Aircraft Certification Service. which took effect on July 1, 2012, raised
principal inspector, the manager of the local [FR Doc. 2016–11682 Filed 5–18–16; 8:45 am] the minimum payment exemption from
flight standards district office/certificate BILLING CODE 4910–13–P $500 to $540; the large franchise
holding district office. The AMOC approval investment exemption from $1 million
letter must specifically reference this AD.
(2) Contacting the Manufacturer: As of the to $1,084,900; and the large franchisee
effective date of this AD, for any requirement FEDERAL TRADE COMMISSION exemption from $5 million to
in this AD to obtain corrective actions from $5,424,500.8
a manufacturer, the action must be 16 CFR Part 436
We base the exemption monetary
accomplished using a method approved by
the Manager, New York ACO, ANE–170, Disclosure Requirements and thresholds that will take effect on July
FAA; or TCCA; or Bombardier, Inc.’s TCCA Prohibitions Concerning Franchising 1, 2016, on the increase in the CPI–U
DAO. If approved by the DAO, the approval between 2007 and 2015. During this
AGENCY: Federal Trade Commission
must include the DAO-authorized signature.
(FTC or Commission). period, the annual average value of the
(m) Related Information Consumer Price Index for all urban
ACTION: Final rule amendments.
(1) Refer to Mandatory Continuing
consumers and all items increased by
Airworthiness Information (MCAI) Canadian SUMMARY: The FTC announces revised 14.31 percent—from an index value of
Emergency Airworthiness Directive CF– monetary thresholds for three 207.342 to a value of 237.017.9
2014–21, dated July 10, 2014, for related exemptions from the Franchise Rule. Applying the percentage increase to the
information. This MCAI may be found in the The FTC is required to adjust the size three monetary thresholds increases the
AD docket on the Internet at http:// of the monetary thresholds every fourth thresholds as follows:
www.regulations.gov by searching for and year based upon the Consumer Price
locating Docket No. FAA–2015–3634.
(2) Service information identified in this
Index for all urban consumers published 1 16 CFR part 436.
AD that is not incorporated by reference is by the Department of Labor. 2 16 CFR 436.8(a)(1).
available at the addresses specified in DATES: This final rule is effective on July 3 16 CFR 436.8(a)(5)(i).
paragraphs (n)(4) and (n)(5) of this AD. 1, 2016. 4 16 CFR 436.8(a)(5)(ii).

(n) Material Incorporated by Reference FOR FURTHER INFORMATION CONTACT: 5 16 CFR 436.8(b).

(1) The Director of the Federal Register
Craig Tregillus, Franchise Rule 6 72 FR 15444 (Mar. 30, 2007).

approved the incorporation by reference Coordinator, Division of Marketing 7 77 FR 36149, 36150 (June 18, 2012).

(IBR) of the service information listed in this Practices, FTC, 600 Pennsylvania 8 Id.

paragraph under 5 U.S.C. 552(a) and 1 CFR Avenue NW., Washington, DC 20580, 9 Bureau of Labor Statistics, CPI Detailed Report:
asabaliauskas on DSK3SPTVN1PROD with RULES

part 51. (202) 326–2970, ctregillus@ftc.gov. Data for February 2016, Table 24, p. 72, available
at http://www.bls.gov/cpi/cpid1602.pdf.

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Federal Register / Vol. 81, No. 97 / Thursday, May 19, 2016 / Rules and Regulations 31501

Adjusted
Exemption 2007 base 2016
threshold

Minimum Payment ................................................................................................................................................... $500 10 $570

Large Franchise Investment .................................................................................................................................... 1,000,000 1,143,100
Large franchisee ...................................................................................................................................................... 5,000,000 5,715,500

Because the calculation of these By direction of the Commission. questions concerning Form SBSE, Form
thresholds is purely ministerial in Donald S. Clark, SBSE–A, Form SBSE–BD, Form SBSE–
nature and implements the Rule’s Secretary. C, Form SBSE–W, and Form 17–H,
mandatory adjustment mechanism, [FR Doc. 2016–11789 Filed 5–18–16; 8:45 am] contact Kathy Bateman at (202) 551–
these adjustments are exempt from the BILLING CODE 6750–01–P
4345; in the Division of Corporation
rulemaking procedures specified in Finance, for questions concerning Form
section 18 of the FTC Act.11 In addition, C, contact Vik Sheth at (202) 551–3818;
the Commission has determined that and in the Division of Economic and
notice and comment are unnecessary SECURITIES AND EXCHANGE Risk Analysis, for questions concerning
under the Administrative Procedure Act COMMISSION XBRL taxonomies, contact Walter
(APA) for the same reason. The 17 CFR Part 232
Hamscher at (202) 551–5397.
Commission, therefore, has omitted SUPPLEMENTARY INFORMATION: We are
notice and comment for good cause as [Release Nos. 33–10071; 34–77693; 39– adopting an updated EDGAR Filer
provided by section 553(b)(B) of the 2509; IC–32091] Manual, Volume II. The Filer Manual
APA.12 For this reason, the describes the technical formatting
requirements of the Regulatory Adoption of Updated EDGAR Filer requirements for the preparation and
Flexibility Act also do not apply.13 Manual submission of electronic filings through
Accordingly, the adjusted thresholds AGENCY: Securities and Exchange the EDGAR system.1 It also describes
will take effect on July 1, 2016. Commission. the requirements for filing using
List of Subjects in 16 CFR Part 436 EDGARLink Online and the Online
ACTION: Final rule.
Forms/XML Web site.
Advertising, Business and industry, The revisions to the Filer Manual
SUMMARY: The Securities and Exchange
Franchising, Trade practices. reflect changes within Volume II
Commission (the Commission) is
Rule Amendments adopting revisions to the Electronic Data entitled EDGAR Filer Manual, Volume
Gathering, Analysis, and Retrieval II: ‘‘EDGAR Filing,’’ Version 36 (April
For the reasons set out in the 2016). The updated manual will be
preamble of this document, the Federal System (EDGAR) Filer Manual and
related rules to reflect updates to the incorporated by reference into the Code
Trade Commission amends 16 CFR part of Federal Regulations.
436 as follows: EDGAR system. The updates are being
made primarily to support the 2016 The Filer Manual contains all the
XBRL taxonomies; add new submission technical specifications for filers to
PART 436—DISCLOSURE
form types SBSE, SBSE/A, SBSE–A, submit filings using the EDGAR system.
REQUIREMENTS AND PROHIBITIONS
SBSE–A/A, SBSE–BD, SBSE–BD/A, Filers must comply with the applicable
CONCERNING FRANCHISING
SBSE–C and SBSE–W pursuant to provisions of the Filer Manual in order
■ 1. The authority citation for part 436 Section 15F of the Securities Exchange to assure the timely acceptance and
continues to read as follows: Act of 1934 (the Exchange Act) and processing of filings made in electronic
Rules 15Fb1–1 through 15Fb6–2 format.2 Filers may consult the Filer
Authority: 15 U.S.C. 41–58.
thereunder; add submission form types Manual in conjunction with our rules
§ 436.8 [Amended] 17HACON, 17HACON/A, 17HQCON governing mandated electronic filing
■ 2. Amend § 436.8 as follows: and 17HQCON/A pursuant to Rules when preparing documents for
■ a. In paragraph (a)(1), remove ‘‘$540’’ 17h–1T and 17h–2T under the Exchange electronic submission.3
and, in its place, add ‘‘$570’’; The EDGAR system will be upgraded
Act; and permit a value of zero in
■ b. In paragraph (a)(5)(i), remove both to Release 16.1 on April 25, 2016 and
addition to the currently allowable
references to ‘‘$1,084,900’’ and, in their will introduce the following changes:
numeric values in the ‘‘Current Number
place, add ‘‘$1,143,100’’; and Pursuant to Section 15F of the
of Employees’’ field on the ‘‘Disclosure
■ c. In paragraph (a)(5)(ii), remove Exchange Act and Rules 15Fb1–1
Requirements’’ screen of the Regulation
‘‘$5,424,500’’ and, in its place, add through 15Fb6–2 thereunder, Security-
Crowdfunding submission form types C,
‘‘$5,715,500’’. based Swap Dealers and Major Security-
C/A and C–U. The EDGAR system was
based Swap Participants will be able to
upgraded to support the new 2016
10 The Commission has rounded this figure from electronically register, amend their
XBRL taxonomies on March 7, 2016.
$571.55 to $570 for compliance clarity and
simplicity. The EDGAR system is scheduled to be 1 We originally adopted the Filer Manual on April
11 See 15 U.S.C. 57a(d)(2)(B); 16 CFR 1.15(b) upgraded to support the other 1, 1993, with an effective date of April 26, 1993.
functionalities on April 25, 2016.
asabaliauskas on DSK3SPTVN1PROD with RULES

(providing that non-substantive amendments to Release No. 33–6986 (April 1, 1993) [58 FR 18638].
trade regulation rules are exempt from the We implemented the most recent update to the Filer
DATES: Effective May 19, 2016 The
rulemaking procedures of Section 18 of the FTC Manual on December 14, 2015. See Release No. 33–
Act). incorporation by reference of the 9987 (January 4, 2016) [81 FR 3].
12 5 U.S.C. 553(b)(B) (providing that ‘‘good cause’’ EDGAR Filer Manual is approved by the 2 See Rule 301 of Regulation S–T (17 CFR

exists to forego notice and comment when public Director of the Federal Register as of 232.301).
comment is unnecessary). May 19, 2016. 3 See Release No. 33–9987 in which we
13 5 U.S.C. 603 and 604 (no regulatory flexibility implemented EDGAR Release 15.4. For additional
analyses required where the APA does not require FOR FURTHER INFORMATION CONTACT: In history of Filer Manual rules, please see the cites
public comment). the Division of Trading and Markets, for therein.

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Document Created: 2018-02-07 15:01:24
Document Modified: 2018-02-07 15:01:24

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		Rules and Regulations
Action		Final rule amendments.
Dates		This final rule is effective on July 1, 2016.
Contact		Craig Tregillus, Franchise Rule Coordinator, Division of Marketing Practices, FTC, 600 Pennsylvania Avenue NW., Washington, DC 20580, (202) 326-2970, [email protected]
FR Citation		81 FR 31500
CFR Associated		Advertising; Business and Industry; Franchising and Trade Practices