July 12 (Reuters) - A U.S. trade regulator on Friday

announced a suite of actions taking aim at "unfair and deceptive

practices" it said are illegally imposed on U.S. franchisees by

their brand owners, such as requiring new fees not outlined in

franchise contracts, or using contract provisions to discourage

franchisees from speaking with regulators.

The U.S. Federal Trade Commission's declaration that

these practices are illegal did not name any specific companies

as being in violation of the law, but in doing so it took a

stance on issues that have inflamed tensions in recent years

between companies and operators at major brands like McDonald's

and Subway.

"Franchising is a chance for Americans to build a

business," said FTC Chair Lina Khan in a statement. "But the FTC

has heard concerns about how unfair franchisor practices, like a

failure to fully disclose fees upfront, go unreported thanks to

a fear of retaliation."

The International Franchise Association, a trade group

that speaks on behalf of franchising companies, criticized the

FTC's actions on Friday as "contrary to the reality that the

vast majority (of) franchise relationships are working and that

franchising continues to grow each year."

Among the actions taken by the FTC was issuing a policy

statement warning brand owners that it is illegal to discourage

franchisees from speaking with regulators about unfair practices

or potential law violations through non-disparagement contract

clauses, or any threat of retaliation.

Relatedly, the agency said it was soliciting a new round

of comments from franchisees, brand owners and other

stakeholders.

The agency also released new guidance that prohibits

"undisclosed junk fees" -- echoing language used to describe

hidden fees imposed on consumers -- that brand owners charge to

franchisees, but which are not outlined in franchise contracts.

As an example, the FTC said brand owners sometimes introduced

these costs through on-the-fly changes to the operating manual,

a sort of rulebook that franchisee owners must abide by to stay

in compliance with their brand owners.

In response to a request for public comments on

franchisor business practices last year, the agency received

5,200 comments, including some from McDonald's franchisees.

The National Owners Association, comprised of several

hundred McDonald's franchisees, said in its comment that "the

current climate is dictatorial and there is zero room for

negotiation" with McDonald's. The burger chain unilaterally

imposes new costs on franchise owners by making changes to the

McDonald's operating manual, then uses non-disparagement clauses

to silence critics, said the franchisee advocacy group, which

formed in 2018.

Asked for comment, McDonald's referred Reuters to the

International Franchise Association's statement.

The FTC said the number of franchise-related complaints

submitted to the agency had increased significantly over the

past three years, citing an analysis by the U.S. Government

Accountability Office published last year.

"Today the Commission is making clear that contractual terms

prohibiting franchisees from reporting potential law violations

to the government are unfair, unenforceable, and illegal," the

FTC statement said.