# Large franchisee exemption

A term used when buying franchise resale.

The Franchise Rule's carve-out for a buyer five years in business with $7,348,000 net worth: no disclosure.

Significant involvement asks whether the franchisor's role makes a resale a covered sale. This asks whether the buyer's own size takes it out again, even when the franchisor runs the whole transfer. The federal rule does not apply where the franchisee, counting its parent and affiliates, has been in business at least five years with a net worth of at least $7,348,000. It also does not apply where the initial investment reaches $1,469,600, leaving out unimproved land and franchisor financing, and the buyer signs an acknowledgment of the exemption. The figures move every fourth year with consumer prices, and the last change came in 2024. So the platform that has grown is the buyer the rule stops protecting: no disclosure document, no earnings section and no fourteen-day wait are owed. A roll-up buyer should ask for the document anyway and write what it would have said into the [purchase agreement](https://searchspheresource.com/glossary/purchase-agreement).

Part of: Buying a Franchise Resale (https://searchspheresource.com/guides/buying-a-franchise-resale)

Source: https://searchspheresource.com/guides/buying-a-franchise-resale/terms/large-franchisee-exemption
Not dated: The same editorial definitions as the glossary, inside a trade.

Site index for machines: https://searchspheresource.com/llms.txt