Improving Franchise Disclosure to Promote Responsible Franchising
To strengthen franchise relationships, protect consumers and improve outcomes for the entire model, IFA supports modernizing the Federal Trade Commission’s (FTC) Franchise Rule to increase transparency in the franchise sales process and strengthen disclosure requirements.
In May 2024, IFA put forward a series of policy recommendations to improve presale disclosure requirements and make due diligence more robust, facilitating a stronger foundation for all franchise relationships, and in California, IF a led the charge advocating for legislation to improve disclosure requirements for third party franchise sellers, which was signed into law in September 2024.
While the franchise rule remains under review, IFA encourages the federal trade commission to adopt the responsible franchising policy recommendations and focus on improving disclosure, so potential franchise owners have access to more fulsome information to make a sound financial investment.