Franchise Disclosure Regulation

The Franchise Disclosure Regulation is a legal requirement that mandates franchisors to provide potential franchisees with a detailed disclosure document before any agreements are signed. This document includes essential information about the franchise, such as costs, risks, the company's financial health, legal obligations, and the background of the franchise system. Its purpose is to ensure transparency, helping prospective franchisees make informed decisions and understand what they're getting into. Regulated by the Federal Trade Commission (FTC) in the U.S., this regulation promotes fair business practices and protects individuals from deceptive or misleading franchise representations.