Deceptive Franchise Ads

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Sean Kelly writing at his Franchise Pick blog has an excellent article about the deceptive advertising by Liberty Tax.  Sean writes:

"A search for Liberty Tax Service on CareerBuilder.com revealed no less than 433  Liberty Tax Service franchise opportunity promotional listings mixed in with the employment ads.

While one of the fields was tagged "Franchise" and the title for most was "Liberty Tax Service - Franchise Ownership," the franchise ads were steeped in employment lingo including  "Job type:  Full Time," "View Full Job Description" & "View Similar Jobs."

Is Liberty Tax Service crossing the line set by the FTC by trolling for franchise prospects among desperate job seekers?"

Here is the ad that Sean spotted.

What Sean was quick to spot was two things: first the franchise is being pitched as a job, and second, to make it more realistic, a "salary" was quoted.

Sean also pointed out that this was probably a violation of the FTC Staff Advisory Opinion, 06-1.

"The only substantive regulation of the content of advertising in the Franchise Rule are provisions regarding the making of earnings claims in the general media. Pursuant to section 436.1(e), a franchisor making earnings claims in advertisements, such as in newspapers or trade journals, must have a reasonable basis for the representation at the time it is made and disclose in immediate conjunction with the earnings claim the number and percentage of purchasers known by the franchisor to have achieved the same or better results in the same time period."

So why does Liberty Tax make such outrageous claims?  Because for the most part they cannot be held accountable.  Any violation of the FTC Rule has to be pursued by the FTC, and the usual integration clause in the franchise agreement will preclude an individual from suing Liberty Tax.

Thanks again to Sean for uncovering this neat bit of deceptive advertising.