FTC Adjusts Monetary Thresholds for Three Exemptions In Franchise Rule

The Federal Trade Commission is adjusting three monetary exemption thresholds for inflation in its Franchise Rule. The thresholds are used to determine whether the sale of a franchise qualifies for an exemption from the Rule. The Rule requires franchisors to disclose key information prospective buyers need to evaluate the risks and benefits of investing in a franchise.

The Rule requires the FTC to adjust the thresholds for inflation every four years based on the Consumer Price Index. The exemptions from compliance with the Rule which will take effect July 1, 2016, are:

  • Sales where the buyer pays less that $570 (currently $540) for the franchise;
  • Sales requiring a large investment where the franchisee pays at least $1,143,100 (currently $1,084,900), excluding the cost of unimproved land and any franchisor (or affiliate) financing; and
  • Sales to large entities, such as multi-unit franchisees, airports, hospitals, and universities that have been in business for at least five years and have a net worth of at least $5,715,500 (currently $5,424,500).

The Commission vote approving the Federal Register Notice was 3-0. The Notice is available on the FTC’s website and as a link to this press release and will be published in the Federal Register soon. (FTC File No. P094400; the staff contact is Craig Tregillus, Bureau of Consumer Protection, 202-326-2970)

The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357).  Like the FTC on Facebook, follow us on Twitter, read our blogs and subscribe to press releases for the latest FTC news and resources.

IR Press

Recent Posts

OCC Announces Enforcement Actions for November 2024

WASHINGTON—The Office of the Comptroller of the Currency (OCC) today released enforcement actions taken against…

21 hours ago

Remarks by Secretary of the Treasury Janet L. Yellen on the 30th Anniversary of the Community Development Financial Institution Fund

As Prepared for Delivery Good afternoon. It’s an honor to welcome President Clinton to Treasury today…

2 days ago

Treasury Sanctions Gazprombank and Takes Additional Steps to Curtail Russia’s Use of the International Financial System

Treasury imposes sanctions on dozens of Russian banks, securities registrars, and finance officials; OFAC issues…

2 days ago

Acting Comptroller Testifies on State of the Federal Banking System

WASHINGTON—Acting Comptroller Michael J. Hsu today testified on the state of the federal banking system…

2 days ago

Remarks by Assistant Secretary for International Finance Brent Neiman on the U.S. Cross-Border Payments Agenda

As Prepared for Delivery Thank you very much for the opportunity to be here today, and…

4 days ago