Freightliner Seeks Exemption from FTC Franchise Rule

The Freightliner Corporation has asked the Federal Trade Commission to exempt the company’s sale of truck dealership franchises 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 six other automobile companies and their subsidiaries. They were granted for reasons that, according to Freightliner, also apply here.

According to the Freightliner petition, the conditions most likely to lead to deceptive practices -- such as a relative lack of business sophistication among potential franchisees -- are not present in its relationships with its dealers. Prospective Freightliner dealers are sophisticated business entities with experience in the retail truck business, the petition says. In addition, sufficient disclosure documents, along with ample time to review them and seek professional advice, are provided as matter of standard practice and no financial incentive exists for Freightliner to engage in unfair or deceptive practices to enlist prospective dealers, it states.

Freightliner, a Portland, Oregon-based corporation, is a wholly-owned subsidiary of the Daimler-Benz group and a sister corporation of Mercedes-Benz of North America.

The Freightliner petition will be published in the Federal Register today and will be subject to public comment for 60 days, until June 11.

Copies of the Federal Register notice 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 news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC’s World Wide Web site at: http://www.ftc.gov

(FTC File No. R511003)