The membership of the North American Securities Administrators Association (NASAA) on May 8, 2017 voted to adopt a Financial Performance Representation Commentary for franchises. The commentary supplements NASAA’s Commentary on the 2008 Franchise Registration and Disclosure Guidelines adopted on April 27, 2009.

This NASAA Commentary addresses a number of questions raised by franchisor representatives and state franchise examiners about financial performance representations (FPRs). This FPR Commentary provides additional guidance for making and substantiating an FPR. It does not address every question that may arise regarding FPRs. Nor does it address issues that may arise when a franchisor makes an FPR outside of a Franchise Disclosure Document.

The effective date of this FPR Commentary is the later of 180 days after the date of adoption by NASAA or 120 days after a franchisor’s next fiscal year end, if the franchisor has an effective Franchise Disclosure Document as of the date of adoption by NASAA. This FPR Commentary guidance applies to Franchise Disclosure Documents updated after the effective date.

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