John Tifford
speaker
727 appearances
2 recordings
1 series
first heard May 2011
last heard Aug 2011
John Tifford’s voice in public audio — every appearance, attributed to the second.
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Appearances
Sometimes you'll convince them to just go away with a warning, and sometimes you might wind up, if they're adamant about it, the regulator's adamant about it, you might wind up having to negotiate some kind of a consent order.
Well, the definition of an earnings claim is something that states or suggests a specific level or range of sales, income, or profits.
So if a broker would specifically mention your franchise, that people who buy this franchise have a million nine in sales, there's no issue, but that they've stated or suggested a specific level or range.
If they say people in the food service industry often make that kind of money, then it becomes a little more of a dicey question because there are all kinds of people in the food service industry.
There are all kinds of restaurants.
There are all kinds of businesses.
Would one reasonably believe that my specific franchise, my specific sandwich franchise is going to make $1.9 million because people in the food service industry average about $1.9 million?
It's a sloppy thing to say.
That's clear.
But the issue would be one of credibility.
Would somebody have read that statement and said, well, that makes me feel that I now have a good idea what my sales would be?
We would never recommend that a franchisor make that kind of a statement.
But having made it, I'm not exactly sure.
Just standing alone, especially in view of what other information that a franchisor is going to be giving the franchisee,
during the sales process, whether it would be a credible, at the end of the day, a credible claim that that number stated is suggested to me a specific level or range of sales that I would make.
And the reason I'd say that is the franchisor would say, well, here's my item 19.
Now, if you notice, I've made an earnings claim where I show what our sales are or I show what our revenues are, things like that.
How could you believe a general statement that the people in the food industry make 1.9 when I have specifically told you what our system does?
I think that would be a very telling argument.
You probably have picked up by now, I'm a very, very strong believer in making earnings claims, both from my regulatory experience and also in private practice.
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