What is the most common franchise scam?

Unlawful earnings claims — quoting revenue or profit figures that do not appear in Item 19 of the FDD. Only Item 19 financial performance representations, made with a reasonable basis and written substantiation, are lawful.

How long do I legally get to review an FDD?

At least 14 calendar days between receiving the FDD and signing any binding agreement or paying any money to the franchisor. Pressure to move faster is itself a violation of the FTC Franchise Rule.

Can I sue a franchisor that violated the FTC Franchise Rule?

Not directly under the federal Rule — there is no private right of action. But most franchise-registration states give buyers their own claims, with remedies that can include damages, rescission, and attorneys’ fees, and the FTC can bring its own enforcement actions.

How do I check if a franchise is legitimate?

Read the FDD front to back, verify state registration where applicable, call franchisees listed in Item 20 (current and departed), and have a franchise attorney review the FDD and franchise agreement before any money changes hands. Reidel Law Firm reviews FDDs and franchise agreements for buyers nationwide on a flat fee — you know the full cost before we start, and you get a plain-English report of every red flag we find. Before you sign or pay anything, get your FDD reviewed.

Franchise Scams: Red Flags and How to Avoid Them

The most damaging franchise scams are not fake companies with fake logos — they are real franchise sellers breaking real disclosure laws. The five that cost buyers the most: earnings claims made outside Item 19 of the Franchise Disclosure Document (the only place financial performance claims are lawful), pressure to sign before the FTC’s mandatory 14-day FDD review window runs, franchises sold unregistered in states that require registration, shell franchisors with no operating history behind