Navistar Seeks Exemption From FTC Franchise Rule

Navistar International Transportation Corporation has asked the Federal Trade Commission to exempt the company’s truck dealership operations from the disclosure requirements of the FTC’s Franchise Rule.

The Franchise Rule requires the seller of a franchise, among other things, to provide each prospective franchisee with a basic disclosure document containing detailed information about the nature of its business and the terms of the proposed franchise relationship. The Commission has previously granted exemptions from the rule to eight other motor vehicle manufacturers or importers.

Navistar, based in Chicago, Illinois, manufacturers heavy-duty and medium-duty trucks, truck parts, and accessories. Navistar has agreements with a limited number of independent businesses throughout the United States to sell and service Navistar trucks and parts.

According to the Navistar petition, the conditions most likely to lead to deceptive practices -- such as the relative lack of business sophistication among potential franchisees -- are not present in its relationships with its dealers. Prospective Navistar dealers are sophisticated businesspersons with experience in the commercial truck business, the petition says. In addition, sufficient financial and business information, along with ample time to review the information and seek professional advice, are provided as matter of standard practice. Thus, Navistar's petition states that no financial incentive exists for Navistar to engage in unfair or deceptive practices to enlist prospective dealers.

The Navistar petition was published in the April 16, 1998 Federal Register and will be subject to public comment for 60 days, until June 15, 1998.

Copies of the Federal Register notice are available from the FTC’s web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.

(FTC Matter No. R511003)