Blenheim Expositions, Inc

Text (OCR of the scan at left; may contain errors)

IN THE MATTER OF BLENHEIM EXPOSITIONS, INC.

CONSENT ORDER, ETC., INREGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket C-3633. Complaint, Dec. 22, 1995--Decision, Dec. 22, 1995 This consent order prohibits, among other things, a Florida-based company, that produces franchise trade shows and expositions, from misrepresenting the sales, income or profits, or the success rate of franchise owners, unless it possesses and relies upon competent and reliable scientific evidence to support the claims. In addition, the respondent is prohibited from misrepresenting the validity, results, contents, conclusions, or interpretations of any survey, test, poll or study.

Appearances For the Commission: Thomas Cohn, Eileen Harrington and Joan Bernstein.

For the respondent: Elaine Johnston, White & Case, New York, N.Y.

COMPLAINT Pursuant to the provisions of the Federal Trade Commission Act, as amended, 15 U.S.C. 41 et seq. ("FTC Act"), and by virtue of the authority vested in it by said Act, the Federal Trade Commission ("FTC" or "Commission"), having reason to believe that Blenheim Expositions, Inc., a corporation, ("respondent"), has violated certain provisions of said Act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges as follows: PARAGRAPH 1. Respondent Blenheim Expositions, Inc. is a Florida corporation with its office and principal place of business at 1133 Louisiana Avenue, Suite 210, Winter Park, Florida. PAR. 2. At all times relevant to this complaint, respondent has maintained a substantial course of business, including the acts and practices set forth herein, in or affecting commerce, as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C. 44. BLENHEIM EXPOSITIONS, INC. 1079 1078 Complaint PAR. 3. Respondent has advertised, promoted, marketed, or conducted franchise shows throughout the United States to promote the sale of franchises and business opportunities to consumers. PAR. 4. Respondent has disseminated or has caused to be disseminated advertisements for franchise shows, including but not necessarily limited to the advertisements attached as Exhibits A, B and C. These advertisements contain the following statements: A. "If you buy a franchise business, your chances of success are 94%! That's a fact, according to a recent Gallup Poll, which found that 94% of the 994 franchise owners polled considered their businesses successful." (Exhibit A, ad #1) B. "The poll also found that the average pre-tax income among franchise owners is $124,290!" (Exhibit A, ad #1) C. "[A]ccording to a recent Gallup Poll, 94% of franchise owners are successful, averaging $124,290 in pre-tax profits... !" (Exhibit A, ad #2) D. "According to a recent Gallup Poll, 94% of franchise owners are successful, averaging $124,290 in pre-tax income... !" (Exhibit A, ad #3) E. "A recent Gallup Poll revealed that 94% of franchise owners are successful, that average pre-tax income is $124,290... !" (Exhibit A, ad #4) F. "If You Go Into Business For Yourself, Your Chances of Success are 94% or 35%! WHICH WILL YOU CHOOSE? If you buy a Franchise Business, your chances of success are 94%! THAT'S A FACT, according to a recent Gallup poll. Conversely, it's estimated that only 35% of independent business start-ups survive 5 years." (Exhibit A, ad #5) G. "The 1991 Gallup Poll revealed an average pre-tax income among Franchises of $124,290... ." (Exhibit A, ad #5) H. "A recent Gallup Poll showed that 94 percent of franchise owners are successful, with an average pre-tax profit of $124,290!" (Exhibit A, ad #6) I. "A recent independent survey showed that franchise owners enjoy an incredible 94 percent success rate and an average income of more than 124 thousand dollars." (Exhibit B; television advertisement) J."A recent poll of 994 franchise owners showed a 94% success rate and an average pre-tax income of over a hundred and twenty four thousand dollars.” (Exhibit C; radio advertisement) A copy of the Gallup Poll referred to above is attached hereto and incorporated herein as Exhibit D.

PAR. 5. Through the use of the statements contained in the advertisements for franchise shows referred to in paragraph four, including but not necessarily limited to the advertisements attached as Exhibits A, B and C, respondent has represented, directly or by implication, that:

Complaint 120 F.T.C.

A. Franchise owners earn an average income and/or average pretax income of more than $124,000;

B. Franchise owners earn an average pre-tax income and/or average pre-tax profit of $124,290;

C. A prospective franchise owner's chances of success are 94%; D. Franchise owners enjoy a 94% success rate; E. Representations A through D were proved by a Gallup Poll of franchise owners conducted in 1991.

PAR. 6. Through the use of the statements contained in the advertisements referred to in paragraph four, including but not necessarily limited to the advertisements attached as Exhibits A-C, respondent has represented, directly or by implication, that at the time it made representations A through D in paragraph five, respondent possessed and relied upon a reasonable basis that substantiated such representations.

PAR. 7. In truth and in fact, at the time it made representations A through D in paragraph five, respondent did not possess and rely upon a reasonable basis that substantiated such representations. Therefore, the representation set forth in paragraph six was, and is, false and misleading.

PAR. 8. In truth and in fact, the Gallup Poll of franchise owners conducted in 1991 does not prove representations A through D in paragraph five, for reasons including but not limited to the following: A. The poll participants were asked to report their annual gross income before taxes, and were not asked to deduct business expenses; B. The poll participants were drawn exclusively from a list of current franchise owners, and no former franchise owners were polled; and C. The poll included a disproportionate number of owners of multiple franchise locations.

Therefore, representation E in paragraph five was, and is, false and misleading.

PAR. 9. The acts and practices of respondent as alleged in this complaint constitute unfair or deceptive acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act, 15 U.S.C. 45(a).

BLENHEIM EXPOSITIONS, INC. 1081 1078 Complaint EXHIBIT A Empire Drive. Florence. Ky. 11042: 1. i Services For Veterans Growtn Assiscinee iMEGA} \ Spec $00-842-3636, {SBN Center and presented hy WIF t+ -- Ask lor No. | Vetfran is a nonprofit group that puts - 0538073217. , military personnel and veterans in tou A book aimed at emerging and existing; with franchisors. Contact Chariie Wood. franchisors is The Francnising Hand- | RO. Box 314G, Waco. Texas 76707: book (AMACOM), edited by Andrew J, | 753~4555. Seminars For Women And Minorilles Women in Franchising (WIF) con- | £ . ducts several seminars aimed at | [ introducing women and minorities | a ; to franchising. Scheduled seminars | E " @ April 24: Washington, D.C.

* This. ull4lay franchise-orientation “seminar, presented by WIF and | be sponrore] hy the: U.S. Minority | in Business Development Agency, is | fru § aimed at minority-group members. | Ini - It is free und will be held at the | is{ - Washington, D.C. Convention Cen- i ter. All participants will receive | loc: tickets to the International. Fran- 1 chise Expo (see the list at right). | Inte we mayer Founder Susan Kezios of thé new Call 1-800-222-1947, @ June 26-27: Philadelphia American Francitixce Association. @ May 15: Chicago. The Mlinois: uly 3l-Auy. 1: Dallas = Franchise Task Force sponsors 2 { WM Aug. 4-15: San Francisco . workshop presented by WIF atthe | Sept:.11-12: Chicago Sherman. Priced at $75, this resource: O'Hare Holiday Inn; $45 per person. For | Oct. 30-31: Atlanta book is a collaborative effort by leading | more information. call 1-800-222-1943, For more information, contact Blenfranchise authorities on a wide range of; Mf May 1: Chicago. This is a three-hour | heim International Franchise Expos. Inc.. topics. Te“order, contact AMACOM, 135 | introductory seminar on franchising | 1133 Louisiana Ave. Suite 210, Winter West 50th St, New York, N.Y. 10020. * sponsored by the Minority Enterprise ! Park, Fla. 32789: (407) 647-8521. It’s Not A Question(i gt > Ry Starting a SUCCESSFUL Business of Your Own Isn't Just A Question of LUCK! if you buy a iranchise ousiness, your chances of success are 94%! That's a fact, ecccrding to a recent Gallup Poll, wnich found that 94% of the 994 Irancnise owners coiled considered their bus:nesses successful The poil also found that ‘ne averege pre-lax income among iranchise owners 1s $124,290! There are atmost 3,000 ocportunities to choose irom in over 40 different industries, and you don't need any prior experience! Start-up costs bein al well below $10,000, ang some can even de run [rom name! Think of it as buying the 100 Gi vour cnoice, AND. being the bess! So if you'd like to receive free, no-adtigation information about {ranchising, tranchise opportunities, and the world’s largest franchise expo, call: A= 2 Complaint 120 F.T.C.

EXHIBIT A “Tf exercised my [BM cari retirement opcon ind wife insisted that I go to tne Francinse Expo. i never intended to buy a irancaise.

4] “My orthodomic pracice J “Job and I shared a condoesn’t allow me che ime. Zz suming desire to own our for hands-on involvement a own business and nurrure it with another busines. 1 ince a highly successtid wanted a qualiry igvesoment operation. TUTOR TIME ver thought about ‘using when | come cuss FLOOR COVER- INGS INTERNATIONAL “Being a single parent. | “aS cxeited about mskung money wniic helping emidren at tne same ome. Now i own my own business ta tradesnow. Bur one tung ico anochet and | invested 13.300 in an FCI iranctuse.

Busnes as Fantasnc and the corporate Dackup 15 absoiute- ‘v outseanding. | oniy wish #2 dene it sooner!”

wath a good income and the epportunity to be home for * sav chiidren, Mv insestment ot time and mener has been very profitable ~ nght new i'm prepanng to buy mv second PRE-FIT francaise ‘opportunity thas wasn’t had deveioped a unique coeesirely risky, with bemer_ concept into a compicte sv3renams than ‘no-risk” tem. using vansterable skills opcons. Levesting int = thoroughiy tught to their franchisee Our decision to own a TUTOR TIME franchise was a choice made 1 didn’t want 10 go (0 we Expo and | didn’t waat io de in the prindng business.

Now ['7 ip dusun anyself with 2 FRAY the best move [ couid have ~ Bill Wellings with a poraon ot the Proriss with contidencs.” Franchisee . from my es Baw ~ Loci Lacy FLOOR COVERINGS = Donna Hendricks Framtie Franchisee. INTERNATIONAL Franchisee, PRE-FIT DENNT'S RESTAURANTS TUTOR TIME FRANKLIN'S PRINTING haever yur reasons for wang 2 svctest rsmess oorawn: take alse ok athe ranciseopton: - Almost 3.000 separate franchise opportunities to choose from — ~ Only a handful require any previous experience - ~ 70 different industry sectors - - Start-up costs from under $10,000 to $1 million plus - Many independent business start-uos tail because oi cbstacies that could have been avoided. With a irancnise, you'll te srainea in avoiding tnose opstacles ang in cening maximum octentai from your business. AND you il get cngcing succes for as long as you run the business. You'll be in business FOR yourself. but not BY yourself. And now - accoraing to a recent Gallup Poll. 94% of franchise owners are successful. sveraging $124,290 in pre-tax profits. and 75% would choose the exact same business again! If you would like to receive a free, no-obligation brochure about franchising and the world’s largest franchise expo. featuring aver 300 exhibitors and a complete program of free seminars call toll-free (U.S. & Canada Only): Discipline - L cadership — - Attitude The parallels benwcen franchise companies and the military are striking — which is why most veterans are ideal for starting a SUCCESSFUL business of their own through fr: anchising, But dot take our word for it, here are the facts: According to at recent Gallup Poll, 949% of hanchise owners are successful, averaging $124,290 in pre-tax income, and 75% said thev'd choose the exact same business “again! What's more, there's now financial assist: exclusively for veterans through «new program co-sponsored by the Small Business Administration that arakes it possible to start up a franchise with no money down! With almost 3,000 opportunities to choose from in over 60 different industries, the best career advice may he... GO INTO BESINESS FOR YOURSELE, BUT NOT BY YOURSELE Yo receive a free, no-obligation brochure about franchising and the world's largest franchise expo. featuring over 300 leading franchise chains. call TOLL-FREE now: a eats trces, A.LUSTAATION UY KENNETH FORD V LIQIHXa qurejduioz “ONI “SNOLLISOdXd WISHNA TE €801 Complaint 120 F.T.C.

EXHIBIT A Look at what we'll be telling alana it MILLIONS OF PEOPLE ivi hititl between now and the _ end of April.

“The IFA International hise Expo tof Franc S€ EXp the exact same franchise again! advertising STP. pe, There are almost 3000 franchise opportunities re ital” — to choose from in almost 70 separate and promotion industries! = 3) i Start-up costs range from under $10,000 to campaign THAT. = over $1 million and only 4 handful require any will impax ct previous experience! iN IONS at CTTTs ce. There will be more franchise opportunities at MILLIONS «: HALE, the [FA INTERNATIONAL FRANCHISE EXPO in y . Washington D.C. on April 23-25, 1993 than have people In ever before been gathered in one placa! -} tain al 30 SIGlES »,, Free information about the Expo is available by . q Tale’ calling the International Franchise Expo 800 and over number hotline! 100 couniries. THE SERIOUS BUYERS WILL BE THERE... RE WILL YOU? For a brochure. and up-to-the-minute Setaiis on remaining scoth space. call: 7) ~ * ¢ : der Ratt om BLENHEIM EXPOSITIONS, INC. 1085 1078 Complaint EXHIBIT A t Kings Island, there are inure chan 100 . including the fastest, iungest, baddest aall coasterdom, the Beast. A suspended cat, Top Gun (Lesed un dhe hie movie) iebut in April. Not for the faint-uf-heart, coaster will feature cars hanginy undera the crack racher than riding on top. cher favorite is the monorail ride chrough Wild Animal Habitat, where lions, fes, and elephanes play and roam freely. e chan 54 million visitors have experid chills and chrill: at this park since ic red in 1972.

ORE THIULLS ARE FOUND AT Coney ISLAND, which fea- 3 a 200-by-400-foor pool, the world's est, cleanest, and brightest recirculating ming facility ~ plus miniature gulf, picgrounds, and children’s rides. Kids love Zoom Flume water slide and the ZIP?"

cr coaster, Any discussion of Cincinnad is incomplete yout a word on food. After all, it is known she “Eating Capical of the Midwest” A at restauranc town, “it’s the nly swp worth sing between New York and San Iran 2," says food guru Craiy Claibume. Mhere's :ng 0 suit every whim and every wailer - =m the five-star Maisoneme to five-star chili. ariy 150 restaurants specialize in the inut +f, although Gold Sear Chili and Skyline | the ewo big oudess. At Skyline alone, more + 66,000 pounds of beer and 40,000 vounis } auld cheddar cheese 4 week are used. cand hear che secret nux consist: uf chocuiate ! cinnamon.) Bob Hope's favorite nbs are served ut . aatgomery Inn's Boathouse un the river- pre-tax income among avand there's also Julinny Benei’s Uall uf and that 75% of F | me steaks ac the Prevines (un ald puiice | choose the exact sami . The 1991 Gallup P -bon). Whatever you du, dun't leave withtsunpling Gracter’s ice cream (mracarian, conut, double chocolate dip), witich is | no-obligation brochure about Franchise opparn ipped all over the country.

Savoring Cincinnati... it can become 4 | and the World’s Largest Franchise-Expo; bit i i L>T OL L@F R: E CE Lilia F. Brady ts managing cattor uf “6 ‘1-800-IFE-INEO.

/ Knowledge is'Power.

LANIER 15. The company with the strongest product guarantee in the industry has now set new standards of excellence with its award-winning copiers. Buvers Laboratory Inc.. an independent olfice products testing firm. has lauded Lanier’s comprehensive product line with its “Most Outstanding Copier Line of the Year” award. Lanier has a copier to fit vour exact needs. With more than 1.600 locations in 80 countries, Lanier's dedicated ser- «vice network is j readv to service vour husiness. Call T.LINEQYEARI7 1-800-852- 2679 or cirde no. 13.

Complaint EXHIBIT A AUVERTISEMENT 16. LifeTrends — For more information on the half-dav diet and/or the LifeTrends opportunity. call 1-800- 688-5752 or circle no. 16.

17, American Leak Detection — Unique franchise opportunity in electronic leak detection and repair of concealed water and gas leaks. Protected territories still available. Financing available OAC. Circle no. 17.

18. The Mentor Group Inc. — Awardwinning consultants that specialize in mentoring individuals as well as small corporations. Get the edge! Please call us at 404-936-8060 or circle no. 18, 19. Styles-on-Video — Become part of a growing network of independent Swvles-on-Video computer imaging consultants/ business owners. Proven success. unlimited marketing potential. Circle no. 19.

20. Computer Associates Textor — CA - Textor is the friendliest. easiest AHH Enclosure C word processor vou will ever meet.

For a limited time. it’s just $99 and Grammatik is free! Call 1-800-225-5224 today for a free demo disk or circle no. 20.

SUCCES SELECTSSEUOCE SS SELECTS 21.Blenheim — The 1FA International Franchise Expo (“IFE™) is the world’s largest franchise event. featuring hundreds of franchise opportunities. A recent Gallup Poll showed thar 94 percent of franchise owners are successful, with TALE AWA LID ONY an average pre-tax profit of 3124.290! The IFE is a three-day event (Fridav to Sunday) April 23 to 25 atthe Washington. D.C..

Convention Center. Call 1-800-1FE- INFO (407-647-8521 outside U.S.

and Canada). Circle no. 21.

FREE 486 Computer Color Monitor Printer You can earn $2,000 to $10,000 per month from your kitchen table providing needed services for your community. Computer FREE CBSI 486 SX Computer Business Services needs individuals to run a computer from ° their home. You do not need to own or know how to run a computer. If you purchase our software. we will give you a FREE 486 computer, VGA color monitor, 80 meg hard drive and a printer. If you already have a computer, we will give you a discount. The industrial revolution is over but the service revolution is just starting. Rather than setting up offices all over the U.S., we are showing individuals and couples how to provide our services and letting everyone involved in this service revolution reap the benefits. Our way of training our new service providers and their success rate is the talk of the computer industry. Call or write fora free 3 hour cassette tape and color literature and find out how easy it can be for you to earn money in your spare time and help your community. Call toll-free: 1-800-343-8014, ext. 48 (in Indiana: 317-758-4415) Fax to: (317) 758-5827 Or Write: COMPUTER BUSINESS SERVICES. INC.. CBS] PLAZA, STE. 48, SHERIDAN, INDIANA 46069 BLENHEIM EXPOSITIONS, INC. 1087 1078 Complaint EXHIBIT B I.F.A. FRANCHISE EXPO SPOT Taped from CNN Headline News, 3-31-93, 8 o'clock Hour Audio Video Announcer: How would you like to Super OWN YOUR OWN own your own successful business and earn over 124 thousand dollars a year.

Well a recent independent survey showed that franchise owners enjoy an incredible 94 percent success rate and an average income of more than 124 thousand dollars.

There are thousands of franchises to choose from. With start-up costs from less than 10 thousand dollars.

And you don't need any previous experience.

If you're serious about running your own business, call this tool free number now to receive a free brochure on franchise opportunities and the world's largest franchise expo.

BUSINESS? EARN $124,000+ A YEAR! Super: Independent Survey 94% Success Rate! Average Income $124,290! Poll Surveyed 994 Franchise Owners Super Over Video: Call Now! 1- 800-IFE-INFO Video: People talking to franchisors at booths. Logo's and booths shown of: Subway, Athlete's Foot, Burger King, American Carpet Gallery, Baskin Robbin, Las Vegas Discount Golf and Tennis, Long John Silver Super: International Franchise Expo (top left screen) IFA Logo (top right screen) APRIL 23, 24, 25, 1993 WASHINGTON, D.C. CONV. CTR.

World's Largest Franchise Expo! 1- 800-IFE-INFO Open to the Public Complaint 120 F.T.C.

EXHIBIT C Radio ad for International Franchise Expo - 60 secs ARE YOU READY TO RUN YOUR OWN SUCCESSFUL BUSINESS? WELL GET READY, BECAUSE THE WORLD'S LARGEST FRANCHISE EXPO IS JUST AROUND THE CORNER.

VISIT THE INTERNATIONAL FRANCHISE EXPO THIS FRIDAY, SATURDAY AND SUNDAY AT THE WASHINGTON D.C. CONVENTION CENTER AND FIND OUT HOW THOUSANDS HAVE BECOME SUCCESSFUL BUSINESS OWNERS, EVEN WITH NO PREVIOUS EXPERIENCE.

A RECENT POLL OF 994 FRANCHISE OWNERS SHOWED A 94% SUCCESS RATE AND AN AVERAGE PRE-TAX INCOME OF OVER A HUNDRED AND TWENTY FOUR THOUSAND DOLLARS.

MCDONALDS, BURGER KING, MINEKE MUFFLERS, DRYCLEN USA AND HUNDREDS MORE - THIS IS YOUR ONCE-A-YEAR OPPORTUNITY TO MEET THEM ALL UNDER ONE ROOF AND FIND THE BUSINESS THAT SUITS YOU.

IF YOU'RE SERIOUS ABOUT BEING IN BUSINESS FOR YOURSELF BUT NOT BY YOURSELF, CALL ONE, EIGHT HUNDRED, FOUR THREE THREE. FOUR SIX THREE SIX FOR DETAILS.

THE INTERNATIONAL FRANCHISE EXPO, THIS FRIDAY, SATURDAY AND SUNDAY AT THE WASHINGTON D.C. CONVENTION CENTER FROM 10AM UNTIL 5PM EACH DAY. CALL ONE EIGHT HUNDRED, FOUR THREE THREE, FOUR SIX THREE SIX.

DON'T MISS IT - IT MAY HOLD THE KEY TO YOUR FUTURE! BLENHEIM EXPOSITIONS, INC. 1089 1078 Complaint EXHIBIT D Db PRINCETON. NEW JERSEY Association Research Group 300 South 68th Street Lincoln, Nebraska 68510 (401) 489-8700 INTERNATIONAL FRANCHISE ASSOCIATION Washington, D.C.

FRANCHISE BUSINESS OWNER STUDY January 1992 Prepared by The Gallup Organization, Inc.

Princeton, New Jersey Copyright © 1992 International Franchise Associanon Complaint 120 F.T.C.

EXHIBIT D he Galles Ongantpalicn, Soe.

PRINCETON. NEW JERSEY INTERNATIONAL FRANCHISE ASSOCIATION Washington, D.C.

NATIONAL FRANCHISE OWNER STUDY Executive Summary January 1992 Prepared by The Gallup Organization, Inc.

Princeton, New Jersey Introduction:.

The Gallup Organization, Inc. of Princeton, New Jersey conducted market research for the Intemational Franchise Association (IFA) of Washington, D.C. The overall purpose of this market research was to determine, among franchise owners, their attitudes and opinions with regard to their franchise-owning experience.

Methodology:

To accomplish the objectives of this study, Gallup interviewed, by telephone, a national sample of 994 franchise owners across the continental United States during November and December 1991. Stability of Results:

At the 95% level of confidence, the maximum expected error range for a sample of 994 respondents is +3.1%. Stated more simply, if 100 different samples of 994 individuals who were franchise owners in the United States were chosen randomly from a national sample of franchise owners, 95 dimes out of 100 the results obtained would vary no mere than +3.1 percentage points from the results that would be obtained if the entire franchise owner population were interviewed. BLENHEIM EXPOSITIONS, INC.

Complaint EXHIBIT D National Franchise Owner Study Major Findings:

1. Almost all (94%) of the respondents said that overall, they considered their franchise operation to be either very (47%) or somewhat (47%) successful.

2. More than seven-tenths of the franchise owners said that their franchise operation had either exceeded or met their expectations with regard to both their personal satisfaction in operating the franchise (76%) and their overall satisfaction(73%). 3. The respondents’ high ratings of satisfaction and success of their operation did not come without hard work. More than eight-tenths of the owners said their franchise operation had met most of, or exceeded, their expectations with regard to the number of hours they had to work (they had to work more). In fact, a positive correlation existed between the respondents’ overall satisfaction with the franchise and their levels of active involvement. The higher the respondents’ level of active involvement on a day-to-day basis with the franchise, the higher their level of satisfaction. 4. Three-fourths (75%) of the respondents said that if given the same opportunity (knowing what they know now) they would purchase or invest in this same franchise business again. Respondents who had income of $50,000 or more were particularly likely to make such a re-investment (81%). Although respondents with higher incomes tended to be more likely to re-invest in the same franchise (if given the same opportunity), it should be noted that the majority of all respondent groups said they would repeat the investment in the franchise again if given the chance.

5. More than six-tenths (63%) of the owners said they were more satisfied with their franchise than with previous business experiences, while 23% reported the same level of satisfaction. 6. Almost eight-tenths (79%) of the respondents rated their relationship with their franchise or company as being either excellent (39%) or good (40%). Only 6% reported “poor” working relationships.

Table A Sample Characterisitcs (n=994) Gender | Male Female IFA Membership Member.

Nonmember Ownership of Franchise Operation.

Sole Owners 63% Multiple Owners 36% Years in Business, Mean 7.4 yrs.

Median 5.0 yrs.

Estimated Gross Income Before Taxes Mean $124,290.

INTERNATIONAL FRANCHISE ASSOCIATION Complaint 120 F.T.C.

EXHIBIT D Overall Success “Overall, would you consider your franchise operation to be very successful, somewhat successful, somewhat unsuccessful or very unsuccessful?” (n=994) 2% 3% Very Unsuccessful = 1% Somewhat Unsuccesstul Don't Know/ Retused 47% 47% Somewhat Successful Almost all (94%) of the respondents said that overall, they considered their franchise operation lo be either very (47%) or somewhat (47%) successful. Only one in fifty (2%) said they considered their franchise operation 10 be very unsuccessful...

Very Successiul + Those respondents who tended to rate their franchise operation overall as being more successful included:

= respondents with incomes of $150,000 or more (67%) + respondents who had been in business for 11 years or more (37°? Table B Estimated Annual Gross Income Before Taxes (n=994) Response % Total Less than $50,000 26% - $50,000 to less than $100,000 23% $100,000 to less than $300,000 26% $300,000 or more 11% Don't Know 2% Refused 12% On average, respondents reporied their annual gross income, before taxes, as a franchise owner was $124,290. Approximately one-half of the respondents (48%) rcponed a gross income under $100,000, while slightly more than one-third (36%) grossed over $100,000.

Table C Estimated Total Investment Cost Including Franchise Fees and any Additional Exs' (n=994) Response Total $50,000 or less 37% $50,001 to $100,000 19% $100,001 to $300,000 18% $300,001 or more 11% Don't Know 4% Refused 14% Mean Cost $147,370 + As would be expected. respondents reponied a wide variety of amounts of total investment cost that they incurred for their ; franchise. On average, however, respondents reported invesung $147,570.

INTERNATIONAL FRANCHISE ASSOCIATION BLENHEIM EXPOSITIONS, INC. 1093 1078 Complaint EXHIBIT D Expectations Level of Expectations Being Met for Various Aspects of the Franchise Met Most of Your Expectations Exceeded Your Expectations Number of Hours Personal Satisfaction in Operating the Franchise Overall Satisfaction Level of Assistance Provided by Franchisor Profit B Given Another Chance...

“Knowing what you know now, if given the opportunity, would you purchase or invest in this same franchise business again?” (n=994) 3% Don't Know/Retused 75% “Yes”

* Those respondents who tended to be most likely to repeat their franchise investment included: + respondents with annual gross incomes of $50,000 or more (81%) + respondents who own two or more franchises (79%) - respondents who had been in the business five years or less (77%) INTERNATIONAL FRANCHISE ASSOCIATION Complaint 120 F.T.C.

EXHIBIT D Comparison to Other Businesses/Jobs Level of Overall Satisfaction as an Owner of a Franchise Compared to Other Businesses Owned/Operated or Jobs Held (n=994) 1% 13% Don't Know Less Satistied About The Same 63% More Satisfied + Relative to other businesses they have owned or operated, or other jobs they have held, a majority of responcents (63%) reported they were more satisfied with the franchise operation, Only slightly more than one-tenth (13%) 0 the respondents said that previous businesses they had owned or operated or jobs they had held proved to be more satisfying than their current position of owning a franchise. American Workers/Franchise Owners Would Repeat Would Repeat Job Experience Franchise Experience % Yes % Yes 100 7) 1007 75% 80 + 60 + American Workers* Franchise Owners © Results are based on a national Gallup poll of n=783 Americans. 18 and older, who held jobs, conducted in July, 1991, with a plus/minus 4% error range. INTERNATIONAL FRANCHISE ASSOCIATION BLENHEIM EXPOSITIONS, INC.

Complaint EXHIBIT D Relationship With Franchisor Ratings of Working Relationships with Franchisor Company (n=994) 6% Poor Good 1% Don't Know/Refused 39% Excellent Approximately four-fifths (79%) of the respondents rated their relationship with the franchisor company as being either excellent (39%) or good (40%). Only 6% of the respondents rated this relationship as poor. Rating of Economic Conditions “AS a business owner, compared to three years ago, do you think ucneral economic conditions are better, about ‘he same or worse?” (n=994; % Total) 1% Don't Know 11% Better 16% Abcul The Sam:

72% Worse Looking Ahead “AS a business owner, in the next three years, do you think general economic conditions will be beuer, about the same or worse?” (n=994) a% 10% Don't Know Worse 28% G About The Same 59% Berner For More Information MPR Department Intemational Franchise Association 1350 New York Avenue, N.W.

Suite 900 Washington, D.C. 20005-4709 Phone: 202-628-8000 Fax: 202-628-0812 The International Franchise Association, founded in 1960, is the oldest and largest association representing franchisors in the world. IFA serves as a resource center for both current and prospective franchisors and franchisees, as well as government and the media. Complaint 120 F.T.C.

EXHIBIT D Complete Study Introduction The Gallup Organization, Inc. of Princeton, New Jersey conducted market research for the International Franchise Association (IFA) of Washington, D.C. The overall purpose of this market research was to determine franchise owners’ attitudes and opinions toward the franchise experience. Methodology To accomplish the objectives of this study, Gallup interviewed, by telephone, a national sample of 994 franchise owners across the continental United States during November and December 1991. Gallup utilized a multiple callback methodology in which up to ten callbacks were made in the same telephone number in order to eliminate bias in favor of those franchise owners easy to reach by telephone. Gallup provided experience, professionally trained interviewers under the exclusive employment of Gallup. All interviewers involved in this project were briefed specifically as to the objectives and methodology of the study. All field work was validated at the 10% level by supervisory callbacks. Telephone interviews were monitored internally as part of the ongoing Gallup process for evaluating interviewers. All completed questionnaires were edited and coded independently as a quality control measure. Sampling and Weighting Methodologies The sample of franchise locations used for this survey was based on a twostage stratified probability design with clustering within units (franchisor systems) drawn at the first stage.

An adequate master list, or "frame" of independent franchise locations did not exist prior to the beginning of this project, al least not in a form that included the relevant business locations and was at the same time practically useful. Available sampling frames were either too inclusive (i.e., Dunn & Bradstreet's business universe of over 7 million U.S. businesses, from which it was impossible to select franchise location directly, and which therefore would have required extensive and costly telephone screening), or incomplete and unacceptably biased from the point of view of representing the universe of franchise locations. In order to provide a sample of franchise locations that would provide both acceptable coverage of the population and reasonable cost efficiencies, The Gallup Organization hired Documents To Go, a Washington DC-based company to draw the sample for a survey of franchise locations research. Documents To Go was instructed to draw the sample in two phases. First, Gallup requested a listing of active franchisors, to be as complete and accurate as possible. The completeness and accuracy of this listing was secured, to the degree that it is possible to do so, by the use of cross-checking of whatever sources were available. The requested listing included the names of franchisors and number of active franchise units for each (i.e., a count of the number of active franchise locations that does not include company-owned locations). Documents To Go, in response to that request, compiled a list of 1,723 U.S., franchisors and provided the number of franchise locations in the U.S., according to the sources used for compilation of the list. Gallup divided this list into five size of franchisor system BLENHEIM EXPOSITIONS, INC. 1097 1078 Complaint EXHIBIT D groupings, or strata, as described in the first column of the table provided below. A random sample of franchisors was selected within each stratum; the sample sizes are provided in the second column of the table. The second stage of sampling was carried out by Document To Go personnel, who were instructed to draw systematic samples of franchise locations for each of the 500 franchisors selected in stage 1. The number of franchise locations selected within a franchise organization (the "cluster size") was dependent upon the size of the organization; larger samples of franchise locations were draw from larger organizations, as shown in the table below: TABLE 1: SAMPLE DESIGN FOR FRANCHISE SURVEY Size of Number of Franchisor Franchisors Cluster System Selected Size 1-2 80 1 3-10 135 2 11-100 150 6 101-1,000 100 20 1,001+ 35 50 The sample provided by Documents To Go was used to complete 994 interviews with franchises. The designs used to draw the sample of franchisees requires weighting before it can be used to represent the population of franchisees. The weighting was intended to correct two potential sources of disproportionality; at the franchisor selection stage, and at the franchise location selection stage. First, a weight was appended to each data record to correct for the fact that the probability of selection at the second stage of sampling was not equal across fanchisors (i.e., 50 franchise locations were selected whether the franchisor organization contained 1,001 or 3,000 locations). A second, independent adjustment was made to correct for the fact that the probability of selection at the first stage of sampling was not equal across franchisor size strata (i.e., franchisors had the same probability of selection whether their organizations included 101 or 1,000 franchise locations). A final poststratification adjustment was used to ensure conformity between the weighted distribution of franchise locations by size stratum, and the known distribution. The analysis provided in the tabulations and the report are based on the sampling and weighting procedures described above, designed to allow Projections to be made from the survey data to the population of franchise owners. Survey Instrument Development Items included in the questionnaire were mutually agreed upon by The Gallup Organization and IFA. IFA had responsibility for identifying question areas and information desired. Gallup had responsibility for ensuring that all items that were written were technically correct and without bias. Stability of Results At the 95% level of confidence, the maximum expected error range for a sample of 994 respondents is +3.1%. Stated more simply, if 100 different samples Complaint 120 F.T.C.

EXHIBIT D of 994 individuals who were franchise owners in the United States were chosen randomly from a national sample of franchise owners, 95 times out of 100 the results obtained would vary no more than +3.1 percentage points from the results that would be obtained if the entire franchise owner population were interviewed. Reports Prepared IFA has been provided a complete set of tabular results by frequency and percentage for each of the major classifications. These tabular result should serve as reference material and be consulted before important decisions are made. This narrative report focuses on what are felt to be the most meaningful findings of this study.

EXHIBIT D TABLE A Sample Characteristics (n=994) Percent Gender Male 82% Female 18 IFA Membership Member 71% Nonmember 29 Ownership of Franchise Operation Sole owner 63% Multiple owners 36 -- The typical franchise owner had the following characteristics: - male (82%) - was an IFA member (71%) - was the sole owner of a franchise (63%) BLENHEIM EXPOSITIONS, INC. 1099 1078 Complaint EXHIBIT D "In total, how many years have you been in business as a franchise owner?" TABLE 1 Number of Years as a Franchise Owner -- in Total % IFA Membership % Total Member Nonmember Number of Years (n=994) (n=593) (n=401) Less than | year 5% 4% 9% One 6 6 4 Two 1] 10 11 Three 15 17 11 Four 11 9 14 Five 8 9 7 5 years or less (Net) 56% 56% 56% Six 6 6 7 Seven 3 2 5 Eight 5 5 5 Nine 3 3 4 Ten 3 3 4 6-10 years (Net) 20 18 25 11-15 years (Net) 12 ll. 13 16-20 years (Net) 6 7 3 21 years or more 6 8 2 Mean (years) 74 7.8 6.5 Median (years) 5.0 5.0 5.0 -- More than one-half (56%) of the respondents said they had been a franchise owner for five years or less. More than three-fourths (76%) had been in the business as a franchise owner for ten years or less. -- On average, respondents said they had been in the business as a franchise owner for slightly more than seven years (7.4). IFA members (7.8 years) tended to have been members slightly longer than their nonmember (6.5) counterparts.

Complaint EXHIBIT D "In total, how many years have you been in business as a franchise owner for this particular business?"

Number of Years as a Franchise Owner - This Particular Business TABLE 2 % Total Number of Years (n=994) Less than | year 7% One 6 Two 12 Three 16 Four 11 Five 8 Six Seven Eight Nine Ten 5 years or less (Net) 60% wwf RD 6-10 years (Net) 21 11-15 years (Net) 10 16-20 years (Net) 4 21 years or more 6 Mean (years) 6.8 Median (years) 4.0 % IFA Membership Member Nonmember (n=593) (n=401) 6% 9% 7 4 12 12 17 13 10 13 9 7 60% 59% 6 7 3 6 5 4 2 4 3 4 19 26 9 13 5 2 8 1 71 5.9 4.0 4.0 Six-tenths (60%) of the respondents said they had been franchise owner of a particular business they were being interviewed about for five years or less. Approximately eight-tenths (81%) had been owners of that business for ten years or less.

On average, respondents had been owners of that particular business for approximately seven (6.8) years.

BLENHEIM EXPOSITIONS, INC. 1101 1078 Complaint EXHIBIT D "OVERALL, WOULD YOU CONSIDER YOUR FRANCHISE OPERATION TO BE VERY SUCCESSFUL, SOMEWHAT SUCCESSFUL, SOMEWHAT UNSUCCESSFUL OR VERY UNSUCCESSFUL?" (n=994) VERY SUCCESSFUL--47% } SSSA OON'T KNOW /REFUSED-- 1% ~ ODO QO) 7 PPG VERY UNSUCCESSFUL--2% SW UNSUCCESSFUL--3% SW SUCCESSFUL--47% FIGURE 1 -- Almost all (94%) of the respondents said that overall, they considered their franchise operation to be either very (47%) or somewhat (47%) successful. Only one in fifty (2%) said they considered their franchise operation to be very unsuccessful.

Complaint 120 F.T.C.

EXHIBIT D “Overall would you consider your franchise operation to be very successful, somewhat successful, somewhat unsuccessful, or very unsuccessful?" eee TABLE 3 Overall Success of Franchise -- By respondent Group eee % very/ % Very % Somewhat Somewhat Successful Successful Successful Total (n=994) 47% 47% 95% IFA Membership Member (n=593) 50% 44% 95% Nonmember (n=401) 39 55 94 Years in Business 5 years or less (n=593) 43% 49% 93% 6-10 years (n=204) 46 51 97 11 years or more (n=197) 57 40 97 Income Under $50,000 (n=271) 21% 52% 88% $50,000 to less than $150,000 (n=347) 52 46 98 $150,000 or more (n=233) 67 29 96 Number of Franchises Owned One only (n=613) 43% 50% 93% Two or more (n=376) 53 44 97 Number of Owners for this Franchise Sole owner (n=662) 49% 46% 96% Multiple owner (n=329) 44 49 93 - OO eee -- Those respondents who tended to rate their franchise operation overall as being more successful included:

- respondents with incomes of $150,000 or more (67%) - respondents who had been in business for 11 years or more (57%) - respondents who own two or more franchises (53%) - IFA member (50% very satisfied) - respondents who were the sole owner of a franchise (49%) BLENHEIM EXPOSITIONS, INC. 1103 1078 Complaint EXHIBIT D “How involved are you with your franchise operation? Would you say you are actively involved on a day-to-day basis, moderately involved, but not on a day-today basis, rarely involved, or not involved?” TABLE 4 Level of Involvement in Franchise Operation Owner satisfaction compared to other jobs, business owned % More % % Less % Total Satisfied Same Satisfied Response (n=994) (n=575) = (n=243) =_(n=143) Actively involved 85% 91% 77% 71% Moderately Involved 11 8 8 15 Rarely involved 3 1 1 7 Not involved 1 0 * 4 Mean** 3.80 3.89 3.69 3.58 * Less than 1% mention ** Actively involved=4, moderately involved=3, rarely involved=2, not involved=1 -- Approximately five-sixths (85%) of the respondents said they were actively involved with their franchise on a day-to-day basis. Almost all (96%) of the respondents said they were either actively or moderately involved in their business’ day-to-day operations.

-- A positive correlation existed between the respondents’ overall satisfaction with the franchise and their levels of involvement. The higher the respondents’ level of satisfaction with the job the higher their level of involvement on a dayto-day basis.

Complaint 120 F.T.C.

EXHIBIT D "Please tell me if your franchise operation has exceeded your expectations, met most of your expectations, met some of your expectations, or not met your expectations with regard to the following? How about regarding ( )?" TABLE 5 Level of Expectations Being Met for Various Aspects of the Franchise (n=994) Personal Level of satisfaction assistance in Number of provided operating Overall hourshad by the satis- Response Profit towork franchisor franchise faction Exceeded your expectations 17% 25% 18% 27% 22% Met most of your expectations 39 57 45 48 51 Exceeded/met most of your expectations 55 82 63 76 73 Met some of your expectations 27 12 25 18 20 Did not meet your expectations 16 4 11 6 Don't know/refused 2 2 1 1 1 Mean* 2.57 3.06 2.71 2.98 2.90 *5=exceeded your expectations, ... 1=did not meet your expectations -- For all five of the areas tested (profit, number of hours had to work, level of assistance provided by franchisor, personal satisfaction in operating the franchise, overall satisfaction), more than one-half of the respondents said their experiences with their franchise operation had either exceeded or met most of their expectations.

-- Respondents particularly felt their expectations had been met or exceeded for the number of hours they had to work (they had to work more than they expected) their personal satisfaction in operating the franchise (76%), and their overall satisfaction with the franchise (73%). NUMBER OF HOURS PERSONAL SATISFACTION IN OPERATING THE FRANCHISE OVERALL SATISFACTION LEVEL OF ASSISTANCE PROVIDED BY FRANCHISOR PROFIT BLENHEIM EXPOSITIONS, INC. 1105 Complaint EXHIBIT D LEVEL OF EXPECTATIONS BEING MET FOR VARIOUS ASPECTS OF THE FRANCHISE MET MOST OF Your EXPECTATIONS % poo jy EXCEEDED your Roxy EXPECTATIONS wrerwree 75% [SOOO CEST bs 73% FIGURE 2 Complaint 120 F.T.C.

EXHIBIT D “As the owner of the franchise, would you estimate that your annual gross income, before taxes, is over or under $100,000?" - YT '-- vO eee TABLE 6 Estimated Annual Gross Income Before Taxes (n=994) % who gave a specific response (excludes Response % Total don't know/refused) Less than $25,000 9% 11% $25,000 to less than $50,000 16 19 Less than $50,000 26% 30% $50,000 to less than $100,000 23% 27% $100,000 to less than $150,000 12 14 $150,000 to less than $200,000 7 9 $200,000 to less than $300,000 6 7 $100,000 to less than $300,000 26% 30% $300,000 or more 11% 13% Don't know 2 Refused 12 Mean $124,290 -- On average, respondents reported their annual gross income, before taxes, as a franchise owner was $124,290. Approximately one-half of the respondents (48%) reported a gross income under $100,000, while slightly more than onethird (36%) grossed over $100,000.

BLENHEIM EXPOSITIONS, INC. 1107 1078 Complaint EXHIBIT D ESTIMATED ANNUAL GROSS INCOME BEFORE TAXES MEAN INCOME $160,000 - $142,760 $136,820 140,000 F 120,000 L $112,430 100,000 - 80,000 60,000 F- 40,000 F 20,000 L § OR LESS (n:$93) 6-10 (ns204) 11 OR MORE {(n3197) YEARS IN BUSINESS FIGURE 3 -- A positive correlation existed between the respondents’ number of years in the franchise business and their estimated annual gross income. The longer the respondents had been in business, the higher was their average reported annual gross income. Respondents who owned two or more franchises tended to report higher gross incomes than did their couterparts who owned only a single franchise.

Complaint 120 F.T.C.

EXHIBIT D "KNOWING WHAT YOU KNOW NOW, IF GIVEN THE OPPORTUNITY, WOULD YOU PURCHASE OR INVEST IN THIS SAME FRANCHISE BUSINESS AGAIN?"

(n=994) YES--75% PENS, 0, ey DON'T KNOW/REFUSED--3% FIGURE 4 -- Three-fourths of the respondents (75%) said that knowing what they know now, if given the opportunity, they would purchase or invest in the same franchise business again. Less than one-fourth (22%) indicated they would not repeat such a purchase or investment decision again. BLENHEIM EXPOSITIONS, INC. 1109 1078 Complaint EXHIBIT D "Knowing what you know now, if given the opportunity, would you purchase or invest in this same franchise business again?" TABLE 7 Incidence of Investing in Same Franchise Business Again -- By Respondent Group % Yes Total (n=994) 15% IFA Membership Member (n=593) 75% Nonmember (n=401) 716 Years in Business 5 years or less (n=593) 171% 6-10 years (n=204) 76 11 years or more (n=197) 72 Income Under $50,000 (n=271) 63% $50,000 to less than $150,000 (n=347) 81 $150,000 or more (n=233) 81 Number of Franchises Owned One only (n=613) 72% Two or more (n=376) 79 Number of Owners for this Franchise Sole owner (n=662) 76% Multiple owners (n=329) 74 -- Those respondents who tended to be most likely to repeat their franchise investment included:

- respondents with annual gross incomes of $50,000 or more (81%) - respondents who own two or more franchises (79%) - respondents who had been in the business five years or less (77%) -- It should be noted that the majority of all respondents said they would repeat the investment in the franchise again if given the chance. Complaint 120 F.T.C.

EXHIBIT D "When you first purchased or invested in this franchise operation, what was the total investment cost, including franchise fees and any additional expenses that you incurred?"

- eee TABLE 8 Estimated Total Investment Cost, Including Franchise Fees and any Additional Expenses That Were Incurred (n=994) % of those who gave a specific answer (excludes Response % Total don't know/refused) $10,000 or less 8% 10% $10,001-$20,000 8 10 $20,001-$30,000 7 9 $30,001-$40,000 6 7 $40,001-$50,000 7 9 $50,000 or less 37% 45% $50,001-$60,000 2 3 $60,001-$70,000 2 2 $70,001-$80,000 7 8 $80,001-$90,000 2 2 $90,001-$100,000 7 8 $50,001 to $100,000 19% 23% $100,001-$200,000 9 12 $200,001-$300,000 5 6 $100,001-$300,000 15% 18% $300,001-$400,000 3 4 $400,001-$500,000 1 2 $500,001 or more 6 7 300,001 or more 11% 13% Don't know 4 - Refused 14 - Mean $147,570 -- As would be expected, respondents reported a wide variety of amounts of total investment cost that they incurred for their franchise. On average, however, repondents reported investing $147,570. BLENHEIM EXPOSITIONS, INC. 1111 1078 Complaint EXHIBIT D "Considering other businesses that you have owned and operated, or other jobs that you have held, would you say that you have worked more hours, about the same amount of hours, or less hours as the owner of this franchise?" rn TABLE 9 Number of Hours Worked as Owner of Franchhise Compared to Other Businesses Owned/Operated or Jobs Held % IFA Membership % Total Member Nonmember (n=994) = (n=593) = (n-401) More hours 51% 51% 52% About the same 30 31 28 Less hours 15 15 13 Not applicable/no other job/business 3 3 4 Net (more hours minus less hours) 37% 36% 39% -- Compared to other businesses they have owned or operated or other jobs they have held, respondents tended to report they were working more hours (51%) as owner of the franchise operation. This was particularly true of respondents who owned multiple franchises. Fifty-seven percent (57%) of these responents said they worked more hours than they did compare to their previous work history.

Complaint 120 F.T.C.

EXHIBIT D "Relative to other businesses that you have owned or operated, or other jobs you have held, would you say you are more satisfied, have about the same level of satisfaction, or are less satisfied overall with being the owner of this franchise?" TABLE 10 Level of Overall Satisfaction as Owner of Franchise Compared to Other business Owned/Operated of Jobs Held % TFA Membership % Total Member Nonmember Response (n=994) (n-593) (n=401) More satisfied 63% 65% 58% About the same level 23 20 28 Less satisfied 13 14 13 Don't know 1 1 1 Net (more satisfied minus less satisfied 49% 51% 44% -- Relative to other businesses they have onwed or operated, or other jobs they have held, a majority of respondents (63%) reported they were more satisfied with the franchise operation. Only slightly more than one-tenth (13%) of the respondents said that previous businesses they had owned or operated or jobs they had held proved to be more satisfying than their current position of owning a franchise.

BLENHEIM EXPOSITIONS, INC. 1113 1078 Complaint EXHIBIT D LEVEL OF OVERALL SATISFACTION AS OWNER OF FRANCHISE COMPARED TO OTHER BUSINESSES OWNED/OPERATED OR JOBS HELD (nz994) MORE SATISFIED--63% 5650,6-0-0-0-; OON'T KNOW--1% enteeetetehetotee 00,0, 0.0.0.4. 6, O OOOO”

ERR RRA ececececenecens OO ABOUT THE SAME--23% FIGURE 5 Complaint 120 F.T.C.

EXHIBIT D “Would you rate your working relationship with the franchisor company as being excellent, good, fair or poor?"

TABLE 11 Ratings of Working Relationships With Franchisor Company % IFA Membership % Total Member Nonmember Response (n=994) (n=593) (n=401) Excellent 39% 38% 43% Good 40 40 40 Fair 14 15 12 Poor 6 7 6 Mean* 3.13 3.10 3.20 -- Approximately four-fifths (79%) of the respondents rated their relationship with the franchisor company as being either excellent (39%) or good (40%). Only 6% of the respondents rated their relationship as poor. BLENHEIM EXPOSITIONS, INC, 1115 1078 Complaint EXHIBIT D RATINGS OF WORKING RELATIONSHIPS WITH FRANCHISOR COMPANY (n=994) EXCELLENT--39% Goo0--40x% FAIR--14% FIGURE 6 Complaint 120 F.T.C.

EXHIBIT D “AS A BUSINESS OWNER, COMPARED TO THREE YEARS AGO, DO YOU THINK GENERAL ECONOMIC CONDITIONS ARE BETTER, ABOUT THE SAME OR WORSE?"

(n=994; % TOTAL) ABOUT THE SAME-- 16% \ BETTER--11% -L~ DON'T KNOW-- 1% WORSE--72% FIGURE 7 -- More than seven-tenths (72%) of the respondents said that compared to three years ago, they felt the general economic conditions were worse now. Only one-tenth (11%) considered economic conditions better than they were three years ago for business owners.

BLENHEIM EXPOSITIONS, INC. 1117 1078 Complaint EXHIBIT D “AS A BUSINESS OWNER, IN THE NEXT THREE YEARS, DO YOU THINK GENERAL ECONOMIC CONDITIONS WILL BE BETTER, ABOUT THE SAME OR WORSE?"

(n=994) BETTER--59% \ BRN SOKO es Se ese teeety 0,000,000, 0,0,0.@ | eX QOL? SOK ABOUT THE SAME--28% FIGURE 8 -- Although respondents considered economic conditions to be worse over the last three years, as business owners in the next three years, the majority (59%) believed that general economic conditions witll be better. Complaint 120 F.T.C.

EXHIBIT D "How many total franchises do you own or have investments in?" TABLE 12 Number of Franchises Own or Invest In % IFA Membership % Total Member Nonmember Response (n=994) (n=593) (n=401) One 54% 51% 62% Two 17 17 17 Three 12 14 7 Four 3 4 2 Five 4 4 4 Six or more 10 9 8 Mean 2.96 2.89 3.13 Median 1.00 1.00 1.00 -- Although a majority of respondents (54%) reported they owned only one franchise, on average, respondents reported owning or investing in three (2.96) franchises.

BLENHEIM EXPOSITIONS, INC. 1119 1078 Complaint EXHIBIT D SURVEY INSTRUMENT CJ Fan ce i ABEOC, TYAL0455 aas5 z >No 8, 399 acs4s Project Registration 420302200 X_ APPROVED BY CLIENT INTERNATIONAL FRANCHISE ASSOCIATION (IFA) DATE.

Copyright, The Gallup Organization, Inc. The Gallup Organization, Inc. INTERVIEWED BY, Cal Martin/Scott Ahlstrand/ Phil Fitzpatric, Specwriter I.D.#:

**AREA CODE AND TELEPHONE NUMBER: ( ) ee (32 - 41) **INTERVIEW TIME: --------- ween nnn eee nn eo none ecowecensenaa (42) (43) Dl. GENDER: deo i do no 1 Male 2 Female 16 (44) D2. NAME OF BUSINESS: {Code from call] record card) NAME: " ve ces 17.10 —— (441 - 480) D3. GROUP: igede from cal] record card) 18.50 .

(513) (514) (515) D4. IPA MEMBER/NON-MEMBER: (To _be coded after whole study 2 Menber 2 Non-member 18 (512) Complaint EXHIBIT D CE} ard 2 6 Hello, this is _ swith The Gallup Organization in Lincoln, Nebraska. Today, we are conducting a very brief study with franchise owners across the United States regarding their experiences with franchises.

1.

In total, how many years have you been in business as a franchise owner? (Open ended and code actual number of years) 96 96+ 98 (DK) 97 Less than 1 year 99 (Refused) 1.10 (412) (413) In total, how many years have you been in business as a franchise owner for this particular business? (Open ended and code actual] number of years) 96 96+ 98 (DK) 97 Less than 1 year 99 (Refused) 2.10 (414) (415) Overall, would you consider your franchise operation to be very successful, somewhat successful, somewhat unsuccessful, or very unsuccessful? 1 Very successful 2 Somewhat successful 3 Somewhat unsuccessful 4 Very unsuccessful 5 (DK) 6 (Refused) 1 (416) How involved are you with your franchise operation? Would you say you are actively involved on a day-to-day basis, moderately involved, but not on a day-to-day basis, rarely involved, or not involved? AWLUNY Actively involved Moderately involved Rarely involved Not involved (DK) (Refused) 4 (417) BLENHEIM EXPOSITIONS, INC.

Complaint EXHIBIT D Please tell me if your franchise operation has exceeded (E) your expectations, met most (MM) of your expectations, met some (MS) of your expectations, or not met (NM) your expectations with regard to the following? How about regarding 3 tat -E)? —_ Mi. MS. NM. (DK) (RF) A. Profit 1 2 3 4 «5 6 ~5.10(418) 7 The mumber of hours you have had to work with your franchise operation 2 2 3 4 5 6 —54.20(419) Cc. The level of assistance provided by your franchisor 1- 2 3 4 5 6 8.20 (420) D. Personal satisfaction in operating the :

franchise 1 2 3 4 5 6 ~5:.40(421) E. Overall satisfaction 1 2 3 4 5 6 —5,.80(422) As the owner of the franchise, would you estimate that your annual gross income, before taxes, is over or under $100,000? 0: 1, ask: Is it over or under $50,000 s ort, ask: Is it over or under $25,000 " 3%: Is it over or under $150,000? Ait "Over, ask:) Is it over or under $200,000? ad U 2 Is it over or under $300,000? 1 Less than $25,000 2 $25,000 to $49,999 3 $50,000 to $99,999 4 $100,000 to $149,999 5 $150,000 to $199,999 6 $200,000 to $299,999 7 $300,000 or more 8 (DK) 5 9 (Refused) 6 __. (53) Knowing what you know now, if given the opportunity, would you purchase or invest in this same franchise business again? 2 2 3 4 Yes No (DK) (RF) 2 (423) When you first purchased or invested in this franchise operation, what was the total investment cost, including franchise fees and any additional expenses that you incurred? (Open ended and code actual amount) (NOTE: sy ure! be a a {NOT TO v. A ° Tente 6 t 999997 $999,997+ 999998 (DK) 999999 (Refused) 8.10 (424) (425) (426) (427) (428) (429) 10.

21.

22.

13.

14.

Complaint EXHIBIT D Considering other businesses that you have owned and operated, or other jobs that you have held, would you say that you have worked more hours, about the same amount of hours, or less hours as the owner of this franchise? 1 More hours 2 About the same (Continue) 3 Less hours 4 (NA/No other job or business) - (skip to #11) 5 (DX) 6 (Refused) (Continue) rt Wye 3 vs o we a: Relative to other businesses that you have owned or operated, or either jobs you have held, would you say you are more satisfied, have about the same level of satisfaction, or are less satisfied overall with being the owner of this franchise? More satisfied About the sama level of satisfaction Less satisfied (DK) (Refused) UhUN PH Would you rate your working relationship with the franchisor company as being excellent, good, fair, or poor? 1 Excellent 4 Poor 2 Good 5 (DK) 3 Fair 6 (Refused) As a business owner, compared to three years ago, do you think general economic conditions are better, about the same, or worse? 1 Better 4 (DK) 2 About the same $ (Refused) 3 worse As a business owner, in the next three years, do you think general economic conditions will be better, about the same, or worse? 1 Better 4 (DK) 2 About the same 5 (Refused) 3 Worse How many total franchises do you own or have investzents in? (Open ended and code actual number) 97 97+ 98 (DK) 99 (Refused) 2 (450) 19 (431) 41 (432) 12: (433) pe (434) 14.10 (435) (436) BLENHEIM EXPOSITIONS, INC. 1123 1078 Complaint EXHIBIT D 15. Are you the sole owner of this franchise operation, or are there multiple owners? 1 Sole owner 3 (DK) 2 Multiple owners 4 (Refused) 15 (437) (VALIDATES PHONE NUMBER AND THANK RESPONDENT) INTERVIEWER I.D.# (241) (242) (243) (244) vkt\assoc\ifa.111 Decision and Order 120 F.T.C.

DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondent named in the caption hereof, and the respondent having been furnished thereafter with a copy of a draft complaint which the Bureau of Consumer Protection proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondent with violations of the Federal Trade Commission Act; and The respondent and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by respondent of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondent that the law has been violated as alleged in such complaint, and waivers and other provisions as required by the Commission's rules; and The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondent has violated the said Act, and that complaint should issue Stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, and having duly considered the comments filed thereafter by interested persons pursuant to Section 2.34 of its Rules, now in further conformity with the procedure prescribed in Section 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

1. Respondent Blenheim Expositions, Inc. is a corporation organized, existing and doing business under and by virtue of the laws of the State of Florida, with its office and principal place of business located at 1133 Louisiana Avenue, Suite 210, Winter Park, Florida.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent, and the proceeding is in the public interest.

BLENHEIM EXPOSITIONS, INC. 1125 1078 Decision and Order ORDER It is ordered, That respondent, Blenheim Expositions, Inc., a corporation, its successors and assigns, and its officers; and respondent's agents, representatives and employees, directly or through any corporation, subsidiary, affiliate, division or other device, in connection with the advertising, promotion, or marketing of franchise shows in or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from misrepresenting, in any manner, directly or by implication, the existence, purpose, sample, contents, validity, results, conclusions or interpretations of any survey, poll, test, report or study.

II.

It is further ordered, That respondent, Blenheim Expositions, Inc., a corporation, its successors and assigns, and its officers; and respondent's agents, representatives and employees, directly or through any corporation, subsidiary, affiliate, division or other device, in connection with the advertising, promotion, marketing, or conducting of franchise shows in or affecting commerce, as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from representing in any manner, directly or by implication:

A. The sales, income, or profits that current or prospective franchise owners have earned or can or will earn; or B. The chances of success or success rates that franchise owners have enjoyed or can or will enjoy, unless, at the time of making such representation, respondent possesses and relies upon competent and reliable evidence, which when appropriate must be competent and reliable scientific evidence, that substantiates the representation. For purposes of this order, "competent and reliable scientific evidence" shall mean analyses, research, surveys, polls, reports, studies or other evidence based on the expertise of professionals in the relevant area, that have been Decision and Order 120 F.T.C.

conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results.

Il.

It is further ordered, That respondent, Blenheim Expositions, Inc., a corporation, its successors and assigns, and its officers, for a period of five (5) years after the date of entry of this order, shall distribute, at each franchise show it promotes, directly or through any corporation, subsidiary, affiliate, division or other device, to at least 500 persons attending such show, or to each person attending such show if the total number of such persons is fewer than 500, a brochure entitled, "A Consumer Guide To Buying A Franchise," provided to the respondent by the Federal Trade Commission. The Commission shall provide to the respondent one camera-ready copy of the brochure, and the respondent is responsible for the printing, and printing costs, of the brochure for distribution at the franchise shows. The brochures distributed by respondent pursuant to this paragraph shall be reproduced in a format substantially similar to the original format, as provided by the Federal Trade Commission; provided, however, that reproduction in a black and white format shall be deemed substantially similar to the original for purposes of this paragraph. Respondent may revise the text of said brochure or substitute another similar document only after submitting said revision or substitution to staff of the Commission, and receiving written approval thereof.

IV.

It is further ordered, That respondent, Blenheim Expositions, Inc., a corporation, its successors and assigns, and its officers, shall: A. For a period of five (5) years after the date of the last dissemination by or on behalf of the respondent of any representation covered by this order, maintain and upon request make available to the Federal Trade Commission or its staff for inspection and copying: 1. All advertisements and promotional materials setting forth such representation;

BLENHEIM EXPOSITIONS, INC. 1127 1078 Decision and Order 2. All polls, surveys, reports, studies, or other documents and materials relied upon by the respondent to substantiate such representation; and 3. All polls, surveys, reports, studies, or other documents and materials (such as correspondence) in the respondent's possession or control that contradict, qualify, or call into question such representation or the basis upon which the respondent relied for such representation;

B. For a period of five (5) years after the date of their creation, maintain and upon request make available to the Federal Trade Commission or its staff for inspection and copying such other documents and materials as shall demonstrate full compliance with this order.

V.

It is further ordered, That, within thirty (30) days after service of this order upon it, respondent, Blenheim Expositions, Inc., its successors and assigns shall distribute a copy of this order to each of its operating divisions and to each of its officers, agents, representatives, or employees engaged in the preparation or placement of advertisements, promotional materials, or other such sales materials covered by this order. VI.

It is further ordered, That respondent, Blenheim Expositions, Inc., its successors and assigns shall notify the Commission at least thirty (30) days prior to any proposed change in said corporation such as a dissolution, assignment, or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries, or any other change in the corporation which may affect compliance obligations under this order.

VIL.

It is further ordered, That this order will terminate twenty years from the date of its issuance, or twenty years from the most recent date that the United States or the Federal Trade Commission files a Decision and Order 120 F.T.C.

complaint (with or without an accompanying consent decree) in federal court alleging any violation of the order, whichever comes later; provided, however, that the filing of such a complaint will not affect the duration of:

A. Any paragraph in this order that terminates in Jess than twenty years;

B. This order's application to any respondent that is not named as a defendant in such complaint; and C. This order if such complaint is filed after the order has terminated pursuant to this paragraph. Provided further, that if such complaint is dismissed or a federal court rules that the respondent did not violate any provision of the order, and the dismissal or ruling is either not appealed or upheld on appeal, then the order will terminate according to this paragraph as though the complaint was never filed, except that the order will not terminate between the date such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal.

Vil.

It is further ordered, That respondent, Blenheim Expositions, Inc., shall, within sixty (60) days after service of this order upon it, and at such other times as the Commission may require, file with the Commission a report, in writing, setting forth in detail the manner and form in which it has complied with this order. PHILLIPS PETROLEUM COMPANY, ET AL. 1129 1129 Complaint