Federal Franchise Rule

The Federal Franchise Rule is a regulation that requires franchisors to provide potential franchisees with detailed, transparent information about the franchise opportunity before they commit. This includes details about costs, legal obligations, financial performance, and the franchise system itself. Its purpose is to help prospective franchisees make informed decisions and ensure transparency in the franchising process, reducing the risk of fraud or misunderstandings. The rule is enforced by the Federal Trade Commission (FTC) and helps create a fair marketplace by requiring clear disclosure upfront.