Franchising Offers a Greater Protection

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In the US, as a result of fraud that has been committed over the years within the field of licensing and franchising, federal law is governed by the Federal Trade Commission (FTC) and has established disclosure and franchising laws to protect investors in this business model. The most recent Amended FTC Rule applies nationally to the offer and sale of franchises; in addition some states have their own franchise laws that apply to their state. These laws give protection to franchisees that reside in the state or establish a franchise business in the state. The Franchise Rule protects potential buyers of franchises by giving the material information needed in order to weigh prudently and independently the risks and benefits of this business model.
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