Null — Franchise or Independent Business: What the FTC's 23 Disclosure Items Show

A franchise buys a working system; an independent business keeps every decision. That trade sits at one of the most common forks on a founder's road. The Federal Trade Commission has turned it into paperwork. Its Franchise Rule, 16 CFR Part 436, governs what a franchisor must show before any founder signs. The rule obliges franchisors to hand over a disclosure document with 23 numbered items. Delivery must come at least 14 calendar days before a founder signs or pays, per the rule's text. The document lists initial fees, court cases, bankruptcies, supplier limits, and any earnings claims. An independent founder produces no such file and inherits every line of it as a decision instead. What Does the FTC Franchise Rule Actually Require? Franchisors must give buyers a 23-item disclosure document before the sale. The rule also bans unilateral, material changes to a signed franchise agreement, per the regulation's text in the Code of Federal Regulations.

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