Significant involvement

Definition

What a franchisor has to do in your purchase before you are owed a disclosure document.

Why It Matters

The disclosure document is defined on this guide as the one a franchisor must give you. On a resale that is not automatic, and the federal rule says so: a transfer by an existing franchisee is outside it where the franchisor has had no significant involvement with the buyer, and approving or disapproving the transfer alone does not count. So where the franchisor stays at arm's length you may be owed nothing, and the transfer fees, the remodel schedule and the litigation history come from the seller with no financial performance section to check them against. A second clock runs the other way: a franchisor that unilaterally and materially changes the agreement owes you the revised paper seven calendar days before you sign, unless you started the negotiation.