Below you will find some important FTC publications that related to investing in a franchise.
Buying a Franchise
Oversight of franchise and business opportunity offerings is an important consumer protection for hundreds of thousands of people who invest in these operations. It requires careful attention by both federal and state authorities.
At the state level, oversight of franchising is grounded in the traditional commitment of state officials to protect consumers whenever possible before they part with their money; and in those cases where money is lost in a fraudulent deal, to exercise the state’s enforcement authority.
Buy an existing business or franchise - Want to be your own boss, but not willing to take on the risk of starting your own business from scratch? Franchising can be a great alternative if you want to have some guidance in the start-up phase of the business.
Franchise Fundamentals: Debunking five myths about buying a franchise - The FTC Business Blog series exploring some of the factors investors should consider as they investigate different franchise opportunities.
Before you invest
The Federal Trade Commission (FTC) issued a rule in 1978 that has served as the primary federal regulation regarding the purchase and sale of franchises in the United States. This rule, titled The Franchise Rule, is intended to give potential buyers of franchises critical information in the form of a Franchise Disclosure Document which can be used to weight the risks of the investment. The FTC has released additional publications and guidance over the years focused on the purchasers of franchises.
Bureau of Consumer Protection - The Federal Trade Commission’s blog on business guidance
Buying a Franchise: Consumer's Guide - The Federal Trade Commission provides advice on avoiding costly pitfalls before buying a franchise. Franchising can give you instant recognition of your business and the ability to obtain ongoing support from your franchiser but be careful: Purchasing a franchise does not guarantee success.
Looking to Earn Extra Income? – The Federal Trade Commission’s Business Opportunity Rule helps you avoid bogus business opportunity offers