What is franchise compliance for a franchisor?

It is the ongoing job of meeting federal and state franchise law plus your own brand standards: keeping the FDD current, registering and renewing in the states that require it, following the disclosure waiting periods on every sale, and enforcing the franchise agreement consistently.

What are the most common franchise compliance mistakes?

Selling on an expired FDD, missing the 14-day delivery window, making earnings claims with no Item 19, letting a state registration lapse, and enforcing brand standards inconsistently. Each can carry penalties or give franchisees rescission rights.

How often does the FDD need to be updated?

Annually, within 120 days of your fiscal year-end, plus mid-year amendments whenever a material change occurs. Registration states then require their own renewals.

Do all states require franchise registration?

No. Fourteen states require registration or filing before you can offer or sell a franchise there. The rest follow the federal FTC Rule, though some have separate business-opportunity or relationship laws to check. A compliance program is cheaper to run than a violation is to fix. Reidel Law Firm helps franchisors build and maintain compliant systems across every state they sell in. Get a franchise compliance review.

FRANCHISE LAW

Franchise Compliance Checklist for Franchisors

Schuyler 'Rocky' Reidel July 17, 2023 4 min read