When franchisors are eager to move a deal forward, disclosure timing is often treated as a formality. In reality, it is one of the most scrutinized compliance requirements in franchising. ⏱️
The 14 day rule under the FTC Franchise Rule sets the foundation for every lawful franchise sale. It governs when a prospective franchisee must receive the Franchise Disclosure Document before signing anything or paying a single dollar.
Misunderstanding this rule can invalidate an otherwise clean deal, delay registrations, or create rescission risk years later.
Let’s walk through what the 14 day rule actually requires, how the timing is calculated, common mistakes franchisors make, and how modern platforms like Zors help automate compliance from day one.
Under the Federal Trade Commission Franchise Rule, franchisors must deliver the Franchise Disclosure Document to a prospective franchisee at least 14 calendar days before either of the following occurs:
The FTC rule states that it is an unfair or deceptive trade practice:
For any franchisor to fail to furnish a prospective franchisee with a copy of the franchisor’s current disclosure document at least 14 calendar days before the prospective franchisee signs a binding agreement with or makes any payment to the franchisor or an affiliate in connection with the proposed franchise sale.
This rule applies to every initial franchise sale nationwide, regardless of state registration status.
The clock starts when the prospective franchisee actually receives the FDD. Not when it is sent. Not when it is uploaded to a portal. Not when a sales call occurs.
Delivery must be provable because it could be challenged by a franchisee, the FTC or a state examiner.
Acceptable delivery methods generally include:
Best practice is to ensure the franchisee affirmatively acknowledges receipt, even if not strictly required in every jurisdiction. Many franchise registration states require retention of these receipts.
💡 Pro tip: If you cannot prove delivery, you should assume the clock never started.
The FTC uses calendar days, not business days (but keep reading to see how some states calculate differently).
Here is the standard calculation method recognized by examiners and franchise counsel:
✅ 14-Day Rule Example:
Day 0 = January 1: FDD delivered
Days 1–14 = January 2–15: Observation period
Earliest signing date = January 16 (Day 15)
✅ 7-Day Rule Example:
Day 0 = March 1: Final agreement delivered
Days 1–7 = March 2–8: Waiting period
Earliest signing date = March 9 (Day 8)
The franchisee must have the full 14 day opportunity to review the disclosure before signing or paying. Any early execution is a technical violation, even if the franchisee requested it.
One of the most common compliance mistakes is misunderstanding what constitutes payment under the FTC rule.
Payment is interpreted broadly and includes:
Even refundable deposits can trigger a violation if accepted before the 14 day period expires.
💡 If money changes hands before the 14 day waiting period has lapsed, the rule has been violated.
Franchisors often run into trouble not because they ignore the rule, but because they misunderstand how strictly it is applied.
Frequent issues include:
Remember, the rule applies to the current disclosure document. If your FDD is amended or renewed, the clock must restart using the updated version.
The FTC rule establishes a federal baseline. State laws can impose stricter standards.
Examples include:
Some registration states require disclosure 10 business days before signing or payment. This often results in longer waiting periods when weekends or holidays are involved.
Certain states require delivery of the FDD before the first substantive in person or virtual sales meeting. If missed, the disclosure timeline may not legally begin.
If a material change occurs during the sales process, state law may require full re disclosure and a new 14 day waiting period.
💡 Always coordinate federal and state timing rules before advancing a deal.
The FTC Franchise Rule also imposes disclosure obligations that apply throughout the sales process, not just at the start of the 14 day waiting period.
First, a franchisor may not refuse to provide the Franchise Disclosure Document earlier in the sales process if a prospective franchisee makes a reasonable request. Even though the Rule sets a minimum delivery deadline, withholding the FDD after a reasonable request can itself be a violation. Specifically, it is an unfair and deceptive trade practice to:
Fail to furnish a copy of the franchisor's disclosure document to a prospective franchisee earlier in the sales process than required under § 436.2 of this part, upon reasonable request.
Second, franchisors must provide the most recent version of the FDD, including any quarterly updates or amendments, upon reasonable request and before the franchise agreement is signed. If the disclosure document has been updated during a long sales cycle, the prospect is entitled to review the current version before execution. Specifically, it is an unfair and deceptive trade practice to:
Fail to furnish a copy of the franchisor's most recent disclosure document and any quarterly updates to a prospective franchisee, upon reasonable request, before the prospective franchisee signs a franchise agreement.
💡 Compliance takeaway: Disclosure is an ongoing obligation. Franchisors should be prepared to deliver the FDD promptly when requested and ensure prospects always have access to the most current disclosure document before signing.
While the FTC rule sets the minimum standard, experienced franchisors typically go further.
Best practices include:
✅ Delivering the FDD as early as possible
✅ Always requiring a signed copy of the receipt page
✅ Avoiding deposits or holds before expiration
✅ Re-disclosing upon material changes and other updates
✅ Delivering the final franchise agreement with an acknowledgment
✅ Tracking timing centrally and with electronic signatures
✅ Training sales teams on compliance boundaries
These practices demonstrate good faith and significantly reduce regulatory risk. Need legal assistance? Contact Derek Colvin, who is a franchise attorney with Waldrop and Colvin.
Zors was built to support real world franchise compliance, not just document storage.
Franchisors use Zors to:
Every FDD delivery is time stamped and logged, and you can create tasks for automatic countdown tracking from receipt.
Acknowledgments, disclosures, and documents are stored in one audit ready system.
Milestone tracking helps prevent agreements from being signed or fees from being collected before compliance windows expire.
Export clean disclosure audit logs for state examiners, renewals, or internal audits in seconds.
📍 Pro tip: Zors ties disclosure records directly to territories and prospects so nothing slips through the cracks.
The 14 day rule in franchising is not a procedural technicality. It is the legal foundation of a compliant franchise sale.
When franchisors respect the timing, document delivery properly, and track disclosure with precision, they protect their brand, their registrations, and their long term growth.
Zors helps franchisors turn disclosure compliance into a repeatable system rather than a recurring risk. Mapping franchise territories and connecting disclosures and contracts with their operators as a franchise CRM and intelligence platform.
📍 Ready to streamline your franchise disclosure process
👉 Book a personalized demo today!
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