Franchise Disclosure Rule

The Franchise Disclosure Rule is a regulation that requires franchisors (franchise companies) to provide prospective franchisees with a detailed disclosure document before they sign any agreement or make any payments. This document, called the Franchise Disclosure Document (FDD), outlines important information about the franchise, such as costs, fees, risks, legal obligations, and the company's financial stability. The goal is to help potential franchisees make informed decisions by ensuring transparency and understanding of what they’re getting into before committing to the franchise opportunity.