Franchise growth depends heavily on smooth, timely approvals from state regulators. But sometimes franchisors hit frustrating delays known as blackout periods—times when they are not legally permitted to offer or sell franchises in certain states due to lapsed registrations, pending renewals, or regulatory backlogs.
This post explains what franchise blackout periods are, why they happen, how they impact sales, and how franchisors can manage or minimize their effects. Plus, we’ll answer your most common questions!
A franchise blackout period is when a franchisor cannot legally offer or sell franchises in a state because:
Their Franchise Disclosure Document (FDD) isn't current 🕒
Their registration or filing has expired or lapsed ⏳
Their renewal application is under review but not yet approved 🔍
They haven’t completed the initial registration process in that state 📝
Even with a valid Franchise Disclosure Document (FDD), sales and offers must stop during registration based blackout periods.
Blackout periods often result from:
🌎 Failure to issue a new FDD: The FDD must be updated annual.
🕒 Late or missed renewals: Renewal filings missed or incomplete cause approvals to expire.
🏛️ Lengthy reviews & backlogs: States with heavy workloads may delay approvals, even for on-time filings.
🔄 Material changes: Updates to your FDD or agreements can trigger extra review time.
The FTC Franchise Rule requires franchisors to issue a new FDD annually, within 120 days of their fiscal year end. This keeps disclosure information fresh and accurate for potential franchisees.
This is a team effort involving:
👔 Business leads updating operations & changes
⚖️ Franchise attorneys drafting and reviewing legal disclosures
📊 Accountants preparing and auditing financial statements
Coordinating early helps meet deadlines and avoids registration delays and blackout risks.
If you want to register in all registration states, working with a peer-reviewed accounting firm is key.
Peer review means the firm’s work is checked by independent experts, which many states require before accepting your financial statements.
Benefits include:
✅ Confidence that financials meet state standards
🌐 Easier filings across multiple states
⏱️ Reduced risk of delays or rejections
Blackouts can cause:
⏳ Sales delays—no legal selling means lost deals
🤷♂️ Confused brokers & prospects—lack of clear communication harms trust
📉 Missed growth targets—planned expansions stall
⚖️ Legal risks—offering or selling during blackout can trigger fines, future disclosure obligations or rescission
While some blackouts are unavoidable, you can limit their effects by:
📅 Monitoring renewal deadlines and filing early
🖊️ Closing deals before registration expires
📢 Communicating clearly with sales teams & prospects about blackout risks
⏳ Building buffer time into expansion plans for state review delays
📊 Using tools like Zors to manage franchise contracts and visualize approval status
Blackout periods can feel like frustrating roadblocks—but with proactive planning, clear communication, and smart tools, franchisors can reduce their impact and keep growth on track.
Explore Zors features, which include a real-time visual way to track franchise approval status and avoid blackout surprises!
Share:
