A supplier faxing ads to a franchise system’s hotels or a buying co-op’s stores usually got the numbers from the franchisor or the co-op. Whether the member’s agreement with that organization counts as permission to receive the supplier’s ads depends on the contract language and the circuit. Two federal appeals courts have said a franchise agreement can do it. The Seventh Circuit said a co-op agreement that never mentioned affiliates or suppliers couldn’t, and that difference decides most of these cases.
Why does it matter who gave permission?
Because a fax ad sent with the recipient’s permission isn’t an unsolicited advertisement at all. The statute, at 47 U.S.C. § 227(a)(5), defines an unsolicited advertisement as one sent to a person “without that person’s prior express invitation or permission, in writing or otherwise.” Permission takes the fax outside the prohibition, and the opt-out notice and the established business relationship rules stop mattering.
The exposure on the other side is the usual TCPA math. A recipient can recover up to $500 per fax under § 227(b)(3), and a court may increase that to up to three times the amount if it finds the violation was willful or knowing. Supplier programs tend to blast the same flyer to every member on the list, so a single campaign to a network of several thousand members can become a class action over every page sent.
Can a franchise agreement give a supplier permission to fax?
The Eleventh and Second Circuits have said yes, on similar facts. In Gorss Motels, Inc. v. Safemark Systems, LP, 931 F.3d 1094 (11th Cir. 2019), Wyndham franchisees sued a safe supplier that faxed them ads through Wyndham’s approved supplier program. Their franchise agreements said Wyndham could offer optional purchasing assistance and that its affiliates could offer that service too, and the hotels listed fax numbers in the same agreements.
The court held that was enough. It wrote that “The hotels expressly agreed to receive information about purchasing items from Wyndham affiliates, so they cannot complain that an affiliate sent them that kind of information.” It also rejected the argument that a sender has to get permission straight from the recipient, holding that “nothing in the text of the Act requires that the sender obtain permission directly from the recipient.”
The same franchisee then lost a second appeal against a different supplier. In Gorss Motels, Inc. v. Lands’ End, Inc., 997 F.3d 470 (2d Cir. 2021), the Second Circuit affirmed judgment for the supplier on the merits and declined to follow the Seventh Circuit’s narrower reading, reasoning that the Seventh Circuit case involved a defendant that had never sought permission from anyone.
Why did the co-op member’s agreement fail in Craftwood?
Because it didn’t say anything about suppliers or affiliates. In Craftwood II, Inc. v. Generac Power Systems, Inc., 63 F.4th 1121 (7th Cir. 2023), two hardware stores belonged to the Do it Best buying cooperative, and a generator maker faxed them ads through a marketing contractor. Generac argued that the stores’ membership agreement, which said the co-op would provide its advertising programs to members for a fee, supplied the permission.
The Seventh Circuit disagreed. The court held that Generac “was not a party to the agreements and we have concluded that express permission under the TCPA is not transferable, as it is the sender itself who must procure that permission.” It added that its precedent “requires some fairly specific and reliable indicia of permission,” and it pointed out that the co-op agreement “contains no language whatsoever allowing affiliates to offer purchasing assistance.”
The non-transfer rule came from an earlier Seventh Circuit case about a company that bought another company’s customer list and faxed everyone on it. That court said in Physicians Healthsource, Inc. v. A-S Medication Solutions, LLC, 950 F.3d 959 (7th Cir. 2020), that letting permission pass to a new company “could eviscerate the entire statutory scheme which is designed to protect consumers from receiving unwanted contact from unknown entities or individuals.”
The Craftwood decision didn’t end the supplier’s defense. The court reversed summary judgment for Generac and sent the case back, partly because a marketing contractor said it had called one store in 2012 to ask for its fax number so it could send promotions. Direct permission from that call is a fact question a jury can decide.
| Case | Agreement language | Result for the supplier |
|---|---|---|
| Gorss v. Safemark (11th Cir. 2019) | Franchisor and its affiliates may offer purchasing assistance, fax number listed | Permission found, judgment for supplier affirmed |
| Gorss v. Lands’ End (2d Cir. 2021) | Same Wyndham franchise terms | Judgment for supplier affirmed |
| Craftwood v. Generac (7th Cir. 2023) | Co-op provides its own advertising programs, no mention of affiliates | Contract gave no permission to supplier, summary judgment reversed |
| A-S Medication (7th Cir. 2020) | Customer list bought from another company | Permission doesn’t transfer to the buyer |
What should a supplier program’s paperwork say?
Enough that a judge in the Seventh Circuit would read it as the member’s own permission to hear from suppliers. Gorss and Lands’ End give suppliers a workable rule in Florida, Georgia, Alabama, New York, Connecticut and Vermont. Craftwood is the standard to draft for anywhere else, because it’s the narrowest reading a court has adopted and nothing in it rejects Gorss outright.
A franchisor or co-op that runs a supplier program can fix most of this at enrollment. The member agreement should name approved suppliers and affiliates as companies that may send product and pricing information, say that fax is one way they may send it, and sit next to the fax number the member provides. The Ninth Circuit hasn’t decided this question, so a California member network has no controlling answer either way. The safer practice there is the Craftwood-proof version.
Suppliers shouldn’t rely on the organization’s paperwork alone. A short permission form collected at a trade show booth or through the supplier’s own sign-up page gives the supplier direct permission that doesn’t depend on reading someone else’s contract. And an ad that carries a compliant opt-out notice keeps the established business relationship defense open for members who already buy from the supplier, which the earlier post on the established business relationship defense covers.
What to gather when a member sues over supplier faxes
- Put a litigation hold on the fax transmission logs, the broadcast vendor’s records, and the member list the supplier used, with the date and source of each fax number.
- Pull every opt-out request the supplier, the franchisor, or the co-op received from the claimant, with dates.
- Collect the claimant’s franchise or membership agreement in the version it signed, plus any enrollment forms, conference registrations, or contact-information sheets.
- Gather the supplier program contract with the franchisor or co-op, any marketing-fund terms, and copies of every fax template sent.
- Have a lawyer review the file before answering the demand or making any offer to the claimant.
Step three is where these cases are usually won. The hotels in Gorss gave Wyndham their fax numbers on several separate forms over the years, and the opinion recites each one. Defense counsel for TCPA fax claims will want every one of those documents, along with the earlier analysis in the post on junk fax defenses and the post on franchisor liability for franchisee texts.
Questions about supplier faxes and member consent
Does a member’s published fax number count as permission?
No. Gorss quoted the FCC’s position that “mere distribution or publication of a telephone facsimile number is not the equivalent of prior express permission to receive faxed advertisements.” The franchisees in Gorss lost because they did more than publish a number. They signed agreements that invited purchasing information from affiliates and listed their fax numbers in the same documents.
Does it matter what the owner says he meant?
Not much, if the contract is clear. In Gorss, the hotel owner testified that no supplier ever had permission to fax him. The court called that testimony immaterial, because the franchise agreements had already given permission and the hotels never took it back. A supplier with good paperwork shouldn’t panic over a declaration from the plaintiff’s principal.
Does the same reasoning cover texts and calls?
Not directly. These cases interpret the fax provision’s permission language. Calls and texts to cell phones use a different consent standard, and marketing messages often need written consent signed by the recipient. A franchisor’s database is a weaker basis for texting member owners on their personal phones than for faxing their front desks.
Can a member revoke permission it gave in a franchise agreement?
Almost certainly, and nothing in these cases says otherwise. The Gorss court noted that the hotels never argued they’d rescinded it. A member’s opt-out request to the supplier, or to the franchisor on behalf of its supplier program, should go on the suppression list right away, and a supplier that keeps faxing after one has lost its best defense for every later page.
If your company faces a supplier fax class action
If your company is accused of faxing ads to franchisees or co-op members without permission, the member agreements and the source of each fax number usually decide the case. Rosenberger + Kawabata represents businesses defending TCPA lawsuits and class actions through its business litigation practice, including claims involving fax advertisements sent through supplier programs. Contact Rosenberger + Kawabata online for a confidential consultation, or call (310) 894-6921.
Sources
The statute is the Telephone Consumer Protection Act, 47 U.S.C. § 227.
The decisions discussed are Craftwood II, Inc. v. Generac Power Systems, Inc., 63 F.4th 1121 (7th Cir. 2023); Gorss Motels, Inc. v. Safemark Systems, LP, 931 F.3d 1094 (11th Cir. 2019); Gorss Motels, Inc. v. Lands’ End, Inc., 997 F.3d 470 (2d Cir. 2021); and Physicians Healthsource, Inc. v. A-S Medication Solutions, LLC, 950 F.3d 959 (7th Cir. 2020).
This post is general information about the Telephone Consumer Protection Act and related laws as of July 14, 2026. It is not legal advice, and reading it does not create an attorney-client relationship. Courts and the FCC change the rules in this area often, and the outcome of any claim depends on its facts. Past results do not guarantee future outcomes.