The Franchise Rule requires franchisors to produce a detailed disclosure document before any money is paid by franchisees.

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The Franchise Rule, enforced by the Federal Trade Commission (FTC), requires franchisors to disclose certain information to potential franchisees in a disclosure document at least 14 days before any money is paid. This document is known as the Franchise Disclosure Document (FDD) and contains information about the franchisor, the franchise system, the costs and fees associated with owning the franchise, the territory or site requirements, and other important information.

The Franchise Rule Requires Franchisors to Produce a Detailed Disclosure