Franchise Rule (FTC)

The Franchise Rule, enforced by the Federal Trade Commission (FTC), requires franchise sellers to provide prospective franchisees with comprehensive, truthful information about the franchise opportunity before they commit. This includes details about the business, costs, restrictions, and risks, typically through a document called the Franchise Disclosure Document (FDD). The goal is to ensure potential franchise owners can make informed decisions and understand what they’re investing in, promoting transparency and fair practices in the franchising industry.