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What the purchaser is buying
The new-business question concerns the purchaser, not how long your brand has operated. The definition also requires payment and specified representations that you or a designated person will provide locations, customers or accounts, or buy back what the purchaser produces.
The customer-provision definition can reach recommended lead-generation or locator services, customer lists and some payment-collection arrangements. General business-development advice, training and advertising alone are not treated as providing customers under that definition.
An established buyer can still be entering a new line
In a fictional offer, an existing facilities operator buys a new cleaning line, required software and a promise of named accounts. Existing trading does not itself answer whether this is a new business or line for that purchaser. Nor does calling the promise marketing support explain whether the seller will teach marketing or provide customers.
Keep the disclosure clock separate from the threshold mismatch
Where Part 437 applies, give its prescribed written disclosure and applicable earnings information at least seven calendar days before the earlier of the purchaser signing any contract connected with the sale or making a payment or providing other consideration, including through a third party. Retain the specified disclosure versions, receipts, contracts and earnings support for three years.
The two current texts use different numbers. Section 437.8’s franchise exclusion has an exception literally referring to payments below $500 and cross-referring to section 436.8(a)(1); the latter now uses $735 for payments or commitments from before opening through the first six months. The 2024 final rule changed Part 436; it did not amend Part 437.
The FTC’s 2011 explanation says the franchise exclusion follows the Franchise Rule’s minimum-payment requirement. Its 2025 proposal would replace the fixed figure with a direct reference to that requirement. That is useful evidence of the intended relationship, but the proposed replacement is not the text currently published. A $600 arrangement illustrates the mismatch: it is below $735 but not below $500. This research does not establish an authoritative resolution for that gap; it does not declare the arrangement exempt from both rules.
Scope
- The $500/$735 interaction remains a genuine text/interpretation conflict after current-text and amendment-history checks. A rule proposal is not an adopted amendment; actual franchise/business-opportunity elements and independent state duties remain separate.
Next step
Describe the exact customer, location or buyback promise before taking money; do not assume an exemption from the unresolved cross-reference.
Sources & review notes
Federal Trade Commission
Passage, dates and research notes
primary · §§437.1–437.3, 437.7–437.9; targeted follow-up: Section 437.8(a), complete exemption language
At least seven calendar days before
Prior AI-assisted review scope (2026-11-12): Read the complete part. The purchaser new-business, required-payment and specified seller-representation conditions are distinct. Current §437.8 literally says $500 while cross-referencing §436.8(a)(1); do not silently replace this with the current $735 franchise exemption amount. The interaction is unresolved here. Targeted follow-up at 2026-11-14T00:50:01.831769+00:00: Full current text retains literal $500 and the reference to 436.8(a)(1). Interpretation is unresolved; no exemption clearance. Follow-up read scope: Section 437.8(a), complete exemption language. This follow-up does not assert a fresh complete review beyond that scope. The earlier reviewed range is preserved, with current form/CISA/docket limits unchanged unless expressly resolved above.
Federal Trade Commission
Passage, dates and research notes
primary · 436.8(a)(1),(b)
less than $735
Read current text; monetary adjustment provision applies to thresholds in this section. It does not itself interpret Part437. Review is limited to 436.8(a)(1),(b). No human or professional legal review is claimed.
Office of the Federal Register / Government Publishing Office
Passage, dates and research notes
primary · 2026 CFR, section 437.8(a)–(b), printed page 547
is less than $500
Actual annual CFR PDF and current eCFR both retain literal $500. No automatic harmonisation with current Part 436 is asserted.
Federal Trade Commission / Federal Register
Passage, dates and research notes
primary · 89 FR 57077–57078; amendment instructions 2(a)
remove “$615”
Read complete amendment instructions; changes only Part 436. Current eCFR corroborates the $735 threshold.
Federal Trade Commission / Federal Register
Passage, dates and research notes
primary · 76 FR 76854–76855, Part H; final 437.8
meets the Amended Franchise Rule’s minimum payment requirement
Read franchise-exclusion explanation and actual 437.8 wording. Historical intention does not by itself amend current numeric text.
Federal Trade Commission
Passage, dates and research notes
primary · 2025 FTC proposal pages 34–35 and proposed 437.8 on page 109
less than the dollar amount specified
Actual FTC proposal pages 34–35 and proposed 437.8 read; proposed dynamic reference is not treated as current. Narrative amount/cross-reference defects are retained in audit scope.
Detailed rule records (1)
Apply actual Part 437 definitions and, where covered, seven-calendar-day disclosure before the earlier any sale-connected contract or consideration, and the specified three-year records. The current 437.8 literal $500 and current 436.8(a)(1) $735 interaction remains authoritatively unresolved despite actual 2011 purpose, 2024 final amendment and 2025 proposed dynamic-reference text. Do not treat the proposal as law or declare exemption from both rules using the amount alone.
16 CFR Part 437: Business Opportunity Rule 16 CFR 436.8: current minimum-payment exemption 2026 CFR section 437.8 — franchise exemption 2024 final Franchise Rule inflation adjustment 2011 Business Opportunity Rule final rule and statement of basis/purpose 2025 Business Opportunity Rule proposed amendmentsKeep this reading in your learning library.
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