In the United States, the FTC Franchise Rule requires every franchisor to give prospective franchisees a Franchise Disclosure Document at least 14 calendar days before they sign a binding agreement or pay any money. The FDD has 23 Items covering fees, initial investment, territory, obligations, litigation history, financial performance representations and audited financial statements.
Fourteen states add their own requirements: California, Hawaii, Illinois, Indiana, Maryland, Michigan (notice filing), Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington and Wisconsin require registration or notice filing before you offer franchises there. Several others require a business-opportunity exemption filing. Use the state guides below to see what applies where you plan to sell.