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Identify the seller and the business

Item 1 covers the franchisor and specified parents, predecessors and affiliates. An affiliate is a related business under the item’s control test; a predecessor is a relevant earlier business. It also addresses the business background, offered operation, market and relevant industry-law context.

A reorganisation does not simply erase required history. Use the complete item to establish which companies and information belong in the disclosure.

Sources: Federal Trade Commission: Item 1: The franchisor and its related entities

Check who makes each important promise

Suppose a Swedish parent creates a U.S. seller while another group company owns the software. Saying “our group supports you” leaves a practical gap: does the seller have the rights and arrangements needed to provide that support?

Compare the named seller with the agreements for brand rights, software, fees and services. Parent ownership alone does not make the parent responsible for the subsidiary’s promises.

Sources: Federal Trade Commission: Item 1: The franchisor and its related entities

Scope

  • This explains the selected federal disclosure item. State and territorial requirements and the terms of the particular offer remain separate.

Next step

Identify the seller and any other company needed to deliver the offer before describing group support to a prospect.

Sources & review notes

Federal Franchise Rule

FTC overview · Compliance Guide · Guide PDF · Current regulation

The Compliance Guide is May 2008 explanatory guidance. The current regulation and later official updates control current requirements and dollar amounts; state and territorial rules are separate.

The source records distinguish access dates from substantive review dates. Updating an explanation does not itself recheck the law.

16 CFR §436.5(a): FDD Item 1

Federal Trade Commission

Passage, dates and research notes

primary · Item 1: The franchisor and its related entities

The name and principal business address of the franchisor

Accessed: 2026-11-12T20:51:48.875978+00:00 · Meaning reviewed: 2026-11-12 · Next review target: 2026-12-12

Current substantive item read in full from current eCFR. This guide explains selected management implications; it is not a substitute for all prescribed disclosure text.

16 CFR §436.6: FDD preparation and records

Federal Trade Commission

Passage, dates and research notes

primary · section-436.6

Respond fully to each disclosure Item.

Accessed: 2026-11-12T20:51:48.875978+00:00 · Meaning reviewed: 2026-11-12 · Next review target: 2026-12-12

Current eCFR displayed through 2026-11-09; eCFR is authoritative but not the official legal edition.

Detailed rule records (1)
FDD Item 1: The franchisor and its related entities Source checked

Item 1 identifies the franchisor and specified parents, predecessors and affiliates, together with business background, the offered business, market and industry-specific legal context. A familiar brand name is not the legal entity that signs every obligation.

When to check: Preparing, updating or comparing an FDD. Source review: 2026-11-12.

16 CFR §436.5(a): FDD Item 1
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