Franchise 14-day rule

Definition

The wait the FTC requires between getting an FDD and signing anything.

Why It Matters

The federal Franchise Rule requires the franchisor to put the disclosure document in your hands at least fourteen calendar days before you sign a binding agreement with it or pay it any money. Buying an existing franchised business puts you on two clocks at once, because the seller wants to close while the franchisor still has to approve you and disclose to you. Treat the fourteen days as a floor rather than a schedule: the document is the only place the transfer fee, the term you inherit, and the remodel obligations are all written down together.

In numbers: A franchisor that hands over the disclosure document on the 3rd cannot take a signature or a $45,000 transfer fee until the 17th.