Franchise Resources

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 grassroots 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 marshal the enforcement resources to shut down the violator and seek restitution if possible.

California adopted the first state franchise statute in 1971. Today, several states have statutes that regulate the offering of franchises for sale. These statutes aredesigned to provide greater protections to prospective franchisees and prevent fraud in the sale of franchise offerings.

In addition to addressing questions of interpretation, the Franchise Commentary contains several sample answers to common franchise disclosure issues. The Franchise Commentary also incorporates items under several previous commentaries NASAA adopted under the 1994 Uniform Franchise Offering Circular Guidelines, to the extent the guidance offered continues to apply under the new Guidelines.  NASAA consulted with Federal Trade Commission staff on the Franchise Commentary, on issues related to disclosure requirements adopted under the FTC’s Amended Franchise Rule.

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