FRANCHISE Compliance Calendar
FIXED CALENDAR DAY DISCLOSURE RULES
FTC 14-Day Rule: FTC regulations require that you distribute a complete Franchise Disclosure Document (FDD) with exhibits to all prospective franchisees on a date that is on a date that is not less than 14 days prior to the signing of any agreement or the acceptance of any money. Note that it is a requirement that you deliver all of the relevant agreements and documents with the FDD.
FTC 7-Day Rule: In addition to the 14 Day Rule, the FTC also requires that no less than 7 days prior to the signing of any agreement or the acceptance of any money that you deliver to a prospective franchisee a completed copy of all agreements and related documents to be signed by the franchisee. The 14 day and 7 day period may run in tandem except where there has been material changes to the franchise agreement in favor of the franchisor, i.e. other than filling in names and dates. If a franchisor however grants any kind of territory, then the 7-day rule will come into play. Please speak to your legal advisor about allowable contract changes that can be made during the 7-day period.
Calculation Method: In calculating the appropriate time period, we do not count either the day the franchise disclosure document is delivered or the day on which the agreement is signed or money is received. For example, when following the 14-day rule, there must be an intervening period that includes 14 days in which no activity occurs. You will note in reviewing the calendar that we have taken this method of calculation into consideration.
It is important to note that state laws may vary. New York and Rhode Island still enforce the first personal meeting rule for disclosure and New York, Rhode Island and Michigan still use business days instead of calendar days. This calendar does not take those state rules into account.
The information contained herein is for informational purposes only as a service to the public, and is not legal advice or a substitute for legal counsel. The calendar is designed to let you know the first day that you can close a transaction if you complied with that applicable rule as of that date. We hope that you will find this calendar to be a useful tool throughout the year. You should always verify the calculation prior to use and discuss your disclosure policies with your legal advisor.
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