What laws govern franchising in the U.S.?
Federal Disclosure Requirements The federal regulations promulgated by the Federal Trade Commission, which apply in all states, require that franchisors must provide prospective franchisees with a detailed disclosure document at least 14 calendar days before the franchisee signs or pays any money. The disclosure document provides, among other things, detailed information about the franchisor, the terms of the franchise agreement, the services which the franchisor will provide, the franchisor’s trademarks, the franchisee’s obligations, the expected start-up costs for the franchisee, the on-going royalties or payments to the franchisor, a detailed description of the training which the franchisor will provide, a copy of the proposed franchise agreement, and audited financial statements. More information about the specific legal requirements can be obtained from the Federal Trade Commission at http://www.ftc.gov/bcp/menus/resources/guidance/franchise.shtm State Registration/Disclosure Requ
