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Identify the arrangement
The item covers compensation or benefits given or promised for public-figure use in the franchise name or symbol, or for endorsing or recommending the franchise to prospective operators. It also addresses relevant management involvement and investment, including the stated value of services.
A public figure can be generally known in the area of the proposed franchise; the definition is not limited to international celebrities. Ordinary consumer advertising should not automatically be treated as franchise-offer promotion.
Separate promotion from delivery
If a presenter appears in recruitment material, state what that person actually does. Promotion, investment and managing training are different roles.
Use the assistance disclosures for support promises and the financial disclosures for financial claims. The public figure’s visibility does not supply that evidence.
Scope
- This explains the selected federal disclosure item. State and territorial requirements and the terms of the particular offer remain separate.
Next step
Make recruitment statements match the actual public-figure arrangement and the disclosures about role, benefits and involvement.
Sources & review notes
Federal Franchise Rule
FTC overview · Compliance Guide · Guide PDF · Current regulation
Federal Trade Commission
Passage, dates and research notes
primary · Item 18: Public figures
The extent to which the public figure is involved in the management or control of the franchisor.
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 18 addresses compensation or benefits to public figures for use or endorsement, their management involvement and investment. A recognisable face is not evidence of unit economics, legal compliance or operating support.
16 CFR §436.5(r): FDD Item 18Keep this reading in your learning library.
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