Is Franchising a Regulated Business Model?

If you’re thinking about starting a franchise, you might wonder — is franchising even regulated? The short answer: yes, it definitely is.

And honestly, that’s a really good thing.

Who Regulates Franchising?

Franchising is regulated by the Federal Trade Commission, or FTC. That’s the big agency that looks out for consumers and businesses across the U.S.

But it doesn’t stop there. Some states have their own rules on top of what the FTC requires. So depending on where you live, franchising can be regulated on both federal and state levels.

Why Does Regulation Matter?

Regulation might sound boring or complicated, but when it comes to franchising, it means protection for you.

The rules make sure franchisors — the companies selling the franchise — act fairly toward their franchisees — that’s you, the person running the local business.

Here’s what franchising regulation does for you:

• Gives you clear rights as a franchisee

• Makes franchisors share important info upfront (like fees and obligations)

• Helps remove dishonest or “bad actor” franchisors from the system

All of this means you can build your business with trust in the brand you’re partnering with.

What Does This Mean for You?

If you’re nervous about jumping into franchising, knowing there’s regulation can be reassuring.

You get:

• Transparency around what you’re getting into

• Legal protections that help prevent surprises

• A system that encourages fairness and honesty

And while no business is risk-free, franchising regulation helps level the playing field and supports you as you grow your business.

Wrapping It Up: Yes, Franchising is Regulated — and That’s Great News

So, is franchising regulated? Yes, it absolutely is. And thanks to the FTC and state laws, you get protection, clarity, and confidence.

If you’re thinking about buying a franchise, take comfort in the fact that there are rules in place to help make your journey smoother and more trustworthy.

It’s one more reason franchising can be a smart way to start a business.

*This is not an offer to sell a franchise. Franchise offerings are made only through the delivery of a Franchise Disclosure Document (FDD)*