MINI-TV USA, Inc.

MINI-TV USA, Inc., and its president have agreed to settle Federal Trade Commission charges that they have deceptively pitched their business opportunity, which involves placing mini, coin-operated television sets in restaurants, laundromats, and other locations. The FTC charged the defendants with overstating franchiseesþ potential earnings, understating the difficulty of placing the TV sets, and failing to provide key pre-purchase information as required by the FTCþs Franchise Rule. Franchisees typically paid about $14,400 for the business opportunity, the FTC staff said. The settlement would prohibit the defendants from making the alleged misrepresentations or violating the Franchise Rule.

Mini-TV and its president, Edmund Albright, are in Sarasota, Florida, and have promoted their business opportunity at franchise and business opportunity trade shows since at least 1990. The coin-operated TV sets bear the Mini-TV logo, and franchisees, or distributors, are to split the income generated by the sets with the owners of the businesses where they are located.

The FTC complaint detailing the charges, filed in federal district court along with the proposed settlement, alleges that the defendants represented to potential franchisees that they could reasonably expect to earn a substantial income, up to $1,460 per TV per year. Few, if any, purchasers can attain such earnings, the FTC charged. In addition, the defendants falsely represented that securing locations for the TV sets could be done without expensive and time-consuming work. The FTC countered that many purchasers have found it difficult or impossible to secure locations for the sets.

The FTC also charged the defendants with violating the FTCþs Franchise Rule, which requires a franchise seller 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 area franchisees. If a franchisor chooses to make earnings claims, the rule requires it to have a reasonable basis for the claims and to provide prospective franchisees with a document to substantiate the claims. According to the FTC complaint, Mini-TV USA, Inc. and Albright have failed to provide both the basic disclosure and the earnings-claim substantiation documents as required by the rule.

The proposed settlement would prohibit the defendants from violating the Franchise Rule, and from misrepresenting the sales, income, profit of a business venture or the ease or difficulty of obtaining customers, locations, or outlets for such a venture. Based on financial disclosures submitted by the defendants, the settlement would not require the payment of consumer redress, but would permit the FTC to reopen the case to seek such funds should the defendants be found to have misrepresented their financial condition.

Finally, the settlement contains various reporting requirements that would assist the FTC in monitoring the defendantsþ compliance.

The Commission vote to file the complaint and stipulated permanent injunction settlement was 5 - 0. They were filed in U.S. District Court for the Middle District of Florida, Tampa Division, on July 25. The settlement requires the court's approval to become binding.

NOTE: The stipulated permanent injunction is for settlement purposes only and does not constitute an admission by the defendants that they violated the law. Settlements have the force of law when signed by the judge.

Copies of the documents in this case are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580: 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest FTC news as it is announced, call the FTC's NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTCþs World Wide Web Site at: http://www.ftc.gov

(FTC File No. 932 3257)
(Civil Action No. 95-1209-CIV-T-17A)