Who regulates franchising in the US?
It’s one of those things you don’t think about until you’re knee-deep in franchise research (or halfway through a podcast on fast food empires):
Who’s in charge here?
Like, when you see a franchise pop up on every corner—whether it’s a smoothie place or a gym or a dog spa (seriously)—who’s making sure they’re playing fair?
The Big One: The FTC
In the U.S., the Federal Trade Commission (FTC) is the main watchdog for franchises.
Think of them like the grown-up in the room.
They don’t let franchisors just hand out brand names and logos like Halloween candy.
Here’s what the FTC makes sure of:
Every franchisor gives a Franchise Disclosure Document (FDD) to potential franchisees
That FDD must be truthful, transparent, and complete
No sneaky clauses or hidden fees allowed
Franchisees get at least 14 days to read and understand what they’re signing
So, the FTC doesn’t approve franchises like a stamp of approval, but they do make sure the rules are clear and the playing field is fair.
But Wait—States Get Involved Too
Some states, of course, wanted to add their own flair.
States like:
California
New York
Illinois
Washington
…decided that FTC regulations were a great starting point—but not quite enough.
So these states have their own extra steps for franchisors:
They may require state-specific registration
Some ask for the FDD to be reviewed (and edited!) before it’s handed out
And they often monitor advertising and marketing claims
It’s not about being difficult—it’s about protecting the people who are putting real money and trust into a franchise.
Why This Matters (Even If You’re Just Getting Coffee)
Even if you’re not buying a franchise tomorrow, this kind of regulation matters.
Why?
Because it impacts the way businesses grow—and how they treat people.
It’s about creating systems with accountability.
And keeping the experience consistent whether you’re grabbing a burger in Austin or ordering a smoothie in Sacramento.
So, Who’s Actually Watching the Franchises?
In short:
The FTC makes sure every franchise in the U.S. follows the federal rules
Some states layer on extra protections (hi, California)
And we all benefit from the transparency
So next time you’re standing in line at a chain, sipping a $7 drink with oat milk and a splash of turmeric, you can smile and think:
Yep. Someone is making sure this all makes sense.
*This is not an offer to sell a franchise. Franchise offerings are made only through the delivery of a Franchise Disclosure Document (FDD)*
