Robbins Research International, Inc.

Motivational speaker Anthony J. Robbins and his company, Robbins Research International, Inc., have agreed to settle Federal Trade Commission charges that they misrepresented the potential earnings of those who bought their franchises for motivational seminars. According to the FTC, prospective franchisees paid Robbins Research International (RRI) fees ranging from $5,000 to as much as $90,000 for the rights to conduct -- and charge admission for -- seminars featuring videotapes of Robbins presenting his motivational techniques. To resolve the FTC allegations, RRI and Robbins have agreed to pay $221,260 in redress to franchisees, and to buy back seminar kits that franchisees purchased in addition to those initially supplied under the franchise arrangement. RRI and Robbins also would be prohibited from violating the FTC's Franchise Rule in the future.

The FTC's Franchise Rule requires a franchisor to provide prospective franchisees with a complete and accurate basic disclosure document containing 20 categories of information, including the history of the franchisor, its managers, litigation history, and information about other franchisees. If a franchisor chooses to make earnings claims, the rule requires it to have a reasonable basis for those claims and to provide a document to prospective franchisees to substantiate them.

The FTC's complaint detailing the charges in this case states that defendants Robbins and RRI advertised, promoted and sold franchises to consumers across the United States. The franchises were to conduct seminars featuring Robbins' "Unlimited Power" and "Power to Influence" motivational video tapes. The defendants also furnished new franchisees with a certain number of seminar kits that contained audio tapes and printed materials for the seminars.

The complaint alleges that the defendants failed to provide prospective franchisees with the basic disclosure document as required by the rule. In addition, the complaint alleges the defendants represented that the franchisees could sell 25 to 100 seminars per month and could earn between $75,000 to $300,000 per year. In fact, according to the complaint, few if any franchisees have been able to sell that many seminars or make these earnings. The defendants also allegedly failed to provide the earnings claims substantiation document required by the rule.

The proposed consent decree to settle these charges, which requires court approval, would prohibit the defendants from violating the Franchise Rule in the future. Further, the defendants have agreed to pay $221,260 into an escrow account to provide redress to franchisees who have not previously settled with the defendants. In addition, the defendants would repurchase for $175 each -- up to a maximum of $49,875 -- any unused kits franchisees purchased from the defendants above and beyond those initially provided.

The FTC filed the complaint and proposed consent decree in the U.S. District Court for the Southern District of California, in San Diego yesterday. The Commission vote to file the complaint and consent decree was 5-0. The FTC's Atlanta Regional Office handled the investigation.

NOTE: A consent decree is for settlement purposes only and does not constitute admission of a law violation. A consent decree has the force of law when signed by the judge.

The FTC has available a brochure, A Consumers Guide to Buying a Franchise, to help consumers who are considering the purchase of a franchise.

Copies of the complaint and proposed consent decree, and the consumer brochure, are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580.

(Civil Action No. 95-CV-627-H (AJB))

(FTC File No. 922 3054)