The new frontier of franchise disclosure

The final version of the amendments to the Federal Trade Commission's (FTC) Rule on Franchising was finally announced in early 2007. Franchisors have until July 1 to convert their offering circulars to the new disclosure format and transform them into "Franchise Disclosure Documents." For more than 12 years, the FTC has conducted its rulemaking and franchising industry members have attended seminars, read articles, observed public comment periods and harkened to innumerable warnings about what living in the world of franchising under the new FTC rule will be like. One of the new terms is "franchise seller." A franchise seller offers or sells the franchise. A franchise seller can refer to the franchise system, its employees and franchise brokers representing the franchisor. If the disclosure document was not in the new format, franchise systems must redisclose utilizing an FTC Rule-compliant disclosure document.