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Franchise and Business Opportunity FAQ


Where can I get a company's pre-sale disclosures?

There are 13 states that keep franchise offering circulars on file, and 23 states that require business opportunity disclosure filings. Most states aren't able to provide copies of these disclosures, but usually will let you visit their offices and review or copy the documents by appointment. A few private companies may also make available franchise disclosure documents filed in one or more states for a fee.

List of state offices with franchise disclosures.
List of state offices with business opportunity disclosures.

How can I find out about complaints against a company?

No federal or state agency or private organization can tell you whether or not a company is legitimate or operates in good faith. For example, the Federal Trade Commission (FTC) can only report on whether it has received consumer complaints about a company. Operators of fly-by-night franchise and business opportunity scams know this, and may change the name and location of their company every six to twelve months so they never have a record of consumer complaints.

There is no substitute for checking the track record of a franchisor or business opportunity seller by talking to at least ten prior purchasers in person. That is why the Franchise Rule requires companies to include in their disclosures a list of the names, addresses and telephone numbers of at least the ten prior purchasers who are geographically closest to you.

If you want information about consumer complaints, any request to the FTC must be in writing. The Commission needs to check whether complaints have been received not only in Washington, but also in its 10 regional offices. You can address your request to:

Freedom of Information Act Request
Federal Trade Commission
Washington, D.C. 20580.
Source: Federal Trade Commission

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