BASIC FRANCHISE REGULATIONS

Question 1

explains costs, risks, and legal details before buying a franchise.

Answer 1

FDD (Franchise Disclosure Document)

Question 2

At least 14 days before signing or paying for a franchise.

Answer 2

Cooling Off Period

Question 3

A legal process where franchisors register their business and provide a Franchise Disclosure Document (FDD).

Answer 3

Franchise Registration

Question 4

Can franchise contracts be changed?

Answer 4

Yes, but big changes must be shared 7 days before signing.

Question 5

If a franchisee later finds that the
franchisor is requiring the franchisee to sign some other agreement beyond those set forth in the FDD,

Answer 5

the franchisor may be acting in violation of the law

Question 6

Franchising grew but had fraud issues.

Answer 6

1950s-60s

Question 7

California was the first state to regulate franchises.

Answer 7

1970

Question 8

The FTC created national franchise rules.

Answer 8

1979

Question 9

FTC updated the rule to reduce differences between state and federal laws.

Answer 9

2007