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When on-site supervision by the owner is not required
Where personal on-premises supervision is not required, Item 15 asks for the following information about the operator (the franchisee). These questions describe your offer; they are not conditions shared by every franchise.
- For an individual franchisee, whether you recommend that individual’s on-premises supervision.
- Limits on whom the franchisee may hire as the on-premises supervisor.
- Whether that supervisor must successfully complete your training programme.
- For a company or other business-entity franchisee, the ownership share (equity), if any, the supervisor must hold in the operating business.
Explain manager restrictions separately
Item 15 also requires disclosure of restrictions the operator must impose on its manager, such as confidentiality or a stated noncompetition restriction. That duty is not limited to the no-personal-supervision situation. Disclosure does not establish whether a restriction is enforceable under other applicable law.
Check the job you are promising can be staffed
For example, an owner staying in Singapore may plan to hire a U.S. manager. Check the actual training, ownership and replacement conditions before assuming any experienced employee can cover an absence. Budget salary, employer costs, benefits and backup cover. Permission to use a manager does not pay for one; employment and work-permission questions remain separate.
Scope
- This explains the federal disclosure item, not whether a particular staffing arrangement or manager restriction is permitted under every applicable law.
Next step
Before describing the offer as manager-run, make the participation, supervisor and replacement conditions match the operation you will actually support.
Sources & review notes
Federal Franchise Rule
FTC overview · Compliance Guide · Guide PDF · Current regulation
Federal Trade Commission
Passage, dates and research notes
primary · Item 15: Participation in actual operation
Disclose the franchisee's obligation to participate personally in the direct operation
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.
Federal Trade Commission
Passage, dates and research notes
primary · section-436.6
Respond fully to each disclosure Item.
Current eCFR displayed through 2026-11-09; eCFR is authoritative but not the official legal edition.
Detailed rule records (1)
Item 15 addresses personal participation requirements or recommendations and applicable on-premises supervision, manager training or equity conditions. Review both written agreements and practice. A promise that an owner can remain abroad must fit the actual staffing obligations.
16 CFR §436.5(o): FDD Item 15Keep this reading in your learning library.
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