FTC Keeps Franchise Disclosure Forms for Another Three Years
Published Date: 8/18/2026
Notice
Summary
The Federal Trade Commission wants to keep its Franchise Rule paperwork rules for three more years, helping people get clear info before buying a franchise. This affects franchisors who must keep detailed records and share important facts with potential buyers. Comments on this plan are open until September 17, 2026, with no new costs expected.
Analyzed Economic Effects
4 provisions identified: 0 benefits, 4 costs, 0 mixed.
Franchisors Must Give Franchise Disclosure
If you sell franchises, you must give every prospective purchaser a Franchise Disclosure Document (FDD) that describes the franchisor, its business, the proposed franchise, and any statements about financial performance. The Rule requires this disclosure so prospective buyers can compare franchise offerings.
Written Basis Required for Financial Claims
If a franchisor makes any financial performance representation about sales, income, or profits, the franchisor must have written information that provides a reasonable basis for that representation. This means franchisors must document support for any earnings claims they make to prospects.
Estimated Annual Burden and Cost to Businesses
The FTC estimates the Rule imposes 22,480 annual burden hours on private-sector businesses, with estimated annual labor costs of $8,403,680 and estimated annual non-labor costs of $4,800,000. The FTC is seeking OMB approval to extend the existing Paperwork Reduction Act clearance for three years.
Three-Year FDD Record Preservation Requirement
Franchisors must preserve materially different copies of their Franchise Disclosure Documents (FDDs) for 3 years. The Rule also requires franchisors to maintain records to help enforcement of the Rule.
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