Last Thursday I published a post regarding 433 franchisee recruitmant ads placed on the employment website CareerBuilder.com. (Read LIBERTY TAX: Deceptive Franchise Ads?)
Within 48 hours (or so), all of the ads were either pulled or revised to be legitimate job ads.
It’s nice to know someone’s reading FranchisePick.com.
There were two major issues with the ads, and I questioned the ethics and even legality of some of Liberty Tax Services franchisee recruitment advertising.
The first issue is that the FTC prohibits running franchise ads masquerading as job ads
On January 30, 2006, the Federal Trade Commission (FTC) issued Informal Staff Advisory Opinion 06-1, which addressed whether a franchisor “may seek leads by posting an offer for employment on an employment website, such as Monster.com or Careerbuilder.com.” The advisory prohibits running employment ads that are truly franchise ads.
The ads were clearly designed to pitch the Liberty Tax Service franchise opportunity to jobseekers.
The second objection may be more serious: the use of illegal earning’s claims. I pointed out it seems inconceivable that a large and experienced franchisor (#3 in the nation?) with a cadre of lawyers somehow missed the section of Franchise Marketing 101 regarding the prohibition against earnings claims outside of the required format of Item 19 of the Franchise Disclosure Document (FDD).
Yet the ads promised financial performance not once, but 433 times:
Job type: Full-Time / Pay: $56K – $69,900/year
The Liberty Tax Service Franchise Disclosure Document does, in fact, include Item 19 Financial Performance Representations, but it does not even vaguely resemble the promise of a “$56K – $69,900/year” franchise owner profit contained in the CareerBuilder ads. In fact, it contains no profit information whatsoever, just the average number of tax returns prepared by 1st, 2nd and 3rd year and older storefront office locations, and an average price per return of $164.20.
It’s nice to feel important, but…
It’s gratifying to see the immediate effect of my post and to play a role in cleaning up deceptive franchise advertising. It wasn’t that hard to spot nor to call attention to.
Perhaps the FTC should hire a franchise blogger to police the Internet and drive the bad guys out of town.
WHAT DO YOU THINK? IS LIBERTY TAX SERVICE FRANCHISEE RECRUITMENT ABOVE-BOARD? SHARE A COMMENT BELOW.
Also read: LIBERTY TAX: Deceptive Franchise Ads?)
Post from: Franchise Pick