Franchising Requirements

Setting up a business as a franchise triggers a slew of legal requirements under federal law, and, in some cases, state law.

To protect franchisees, the federal government, acting through the Federal Trade Commission (FTC), requires extensive disclosure of information from the franchisor. In addition to FTC franchise rules, many states have also implemented their own franchise regulations, minimum disclosure requirements, and registration forms.

Most of the disclosure requirements concern earnings claims and forecasts that must be justifiable. All claims (written or oral) have to be backed up by the disclosure documentation.

Other disclosures include: trademarks and tradenames associated with the franchisor; legal standings of the franchisor’s directions (including past bankruptcies), and audited financial statements.

In our 20 years experience working with franchise owners at all stages of their development, we’ve often collaborated with franchise attorneys to speed up the process and reduce the costs of franchising.

For more information on franchising requirements and how our operations manuals and training programs can be incorporated into the franchising process, please call (303) 284-2515, or e-mail info@franchisepowertools.com.

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