Franchise Glossary
FTC Franchise Rule
What is FTC Franchise Rule in franchising?
The federal regulation that governs franchising in the United States. It requires every franchisor to provide you with a Franchise Disclosure Document at least 14 days before you sign anything or pay any money. The rule defines a franchise as any business relationship involving three elements: use of the franchisor's trademark, significant operational control or assistance, and a required payment of $500 or more. If a franchisor skips any disclosure requirements, they are breaking federal law.