ASA Adjudication on N5 Ltd

Ad

Two ads in a newspaper for a franchise exhibition.

a. The ad feature for thebestof stated “She [Alison] now enjoys the flexibility and rewards for working for herself, and says that she is earning more money than in any of her previous jobs, turning over more than £7,000 a month.” The ad went on to state “Sponsored by Express Newspapers, the exhibition is endorsed by the bfa, and only those franchise companies that have met the association’s code of ethics are allowed to exhibit at the event.”

b. The press ad, directly below ad (a), stated “Alison earns £7,000 a month”.

Issue

The complainant challenged whether:

1. the claim "turning over more than £7,000 a month" in ad (a) and the claim "Alison earns £7,000 a month" in ad (b), misleadingly exaggerated the likely earnings of franchisees, and

2. the claim "the exhibition is endorsed by bfa [British Franchise Association]" was misleading because she understood thebestof were not members of the bfa.

CAP Code (Edition 11)

Response

1. Thebestof said the words "turnover" and "earnings" were used interchangeably but believed that they both meant "gross income". In relation to Alisons earnings, thebestof believed they had underestimated the stated amount and argued that she earned in excess of £7,000. Thebestof sent spreadsheets and e-mails from seven franchises which they believed demonstrated that some franchises made a gross profit of £7,000.

2. Thebestof confirmed that they were not members of the bfa. However, they said they did adhere to their Code of Ethics and had been permitted to exhibit at bfa approved exhibitions. They believed that demonstrated they were approved by the bfa.

Assessment

1. Upheld

The ASA noted thebestof had conflated the terms "turnover" and "earnings." We understood that some franchises that had signed up over 300 businesses could generate up to £15,000 in gross income. However, the bestof had not shown us what proportion of franchises earned that maximum amount. We also understood that it would take time for a franchisee to generate a significant customer base to generate that higher income, which was not made clear in the ad. Although we accepted some franchises could generate £7,000 gross income, we considered that readers would understand from the ad and the claims "she [Alison] is earning more money than in any of her previous jobs, turning over more than £7,000 a month" in ad (a) and "Alison earns £7,000 a month" in ad (b), that a franchisee could expect to earn that amount per month after costs and taxes had been deducted and that the higher amount would be ones personal income. Because that was not the case, we concluded that ads (a) and (b) exaggerated the likely earnings of a franchisee and were misleading.

On this point, the ad breached CAP Code clauses 3.1 (Substantiation), 7.1, 7.2 (Truthfulness), 14.3, 14.8 (Testimonials and endorsements) and 52.5 (c) (Employment and business opportunities.)

2. Not upheld

We noted the ad claimed "the exhibition is endorsed by the bfa, and only those franchise companies that have met the associations Code of Ethics are allowed to exhibit at the event" and did not state that thebestof were bfa members. We acknowledged that thebestof were allowed to exhibit at bfa endorsed events where only companies that met bfas Code of Ethics were permitted to do so. We therefore considered that ad (a) was unlikely to mislead on those grounds.

On this point, we investigated under CAP Code clauses 3.1 (Substantiation), 7.1 and 7.2 (Truthfulness) but did not find the ad in breach.

Action

Ads (a) and (b) should not appear again in their current form. We told thebestof to ensure that future marketing communications accurately described potential earnings figures and held robust evidence to demonstrate that those figures were representative.

Adjudication of the ASA Council (Non-broadcast)