---
title: "FTC Targets Undisclosed Franchising Fees: Industry Implications"
url: https://burnaze.com/article/ea0a434c-af9e-4698-aff4-e4f4554b4ff8
source: "1851 Franchise"
original_url: https://1851franchise.com/ftc-targets-undisclosed-franchising-fees-implications-for-the-industry-2726689
category: "Franchise Industry"
industry: "Franchise Industry"
topics: ["Regulation & legal"]
published: 2024-07-16T17:12:03.000Z
modified: 2026-11-01T01:07:37.401Z
image: https://newimage.1851franchise.com/cdn-cgi/image/quality=85,format=webp,width=1280,height=720/story/featureImage/4321ac8e163c7f1b720288c8aabb36b25116.jpg
---

# FTC Targets Undisclosed Franchising Fees: Industry Implications

**TL;DR:** The Federal Trade Commission (FTC) announced new guidance making it illegal for franchisors to charge and collect undisclosed fees, aiming to increase transparency and protect franchisees. The FTC also clarified that non-disparagement clauses preventing franchisees from reporting to regulators are against the law.

*originally published in 1851 Franchise on 2024-07-16. [Read the original](https://1851franchise.com/ftc-targets-undisclosed-franchising-fees-implications-for-the-industry-2726689).*

## Story

On July 15, the Federal Trade Commission (FTC) announced new guidance making it illegal for franchisors to charge and collect undisclosed fees. The FTC also clarified that non-disparagement clauses preventing franchisees from reporting to regulators are against the law, Restaurant Dive reported. This initiative aims to increase transparency and protect franchisees from unfair practices that can impact their profitability.

Franchisees have raised concerns about unexpected technology and payment processing fees not disclosed in franchise agreements. The FTC’s intervention underscores the necessity for franchisors to review their practices to comply with transparency laws.

Matthew Haller, president and CEO of the International Franchise Association (IFA), highlighted the importance of transparency but argued that the new guidance could stifle innovation and adaptability. He stated, “The FTC guidance runs contrary to the practices of the majority of franchisors and would unnecessarily restrict franchisors’ ability to innovate and evolve their system, damaging the equity of franchisees.”

This guidance is part of a broader trend towards increased regulation of undisclosed fees across industries. Earlier this year, California implemented a rule requiring businesses to disclose all mandatory fees, reflecting growing consumer demand for transparency. Washington, D.C., introduced measures to protect businesses from deceptive fee practices.

The FTC’s crackdown on undisclosed fees and restrictive clauses ensures a fairer landscape for franchisees. It highlights the importance of transparent and fair practices in franchising, safeguarding smaller operators from hidden costs and restrictive contracts.

## Entities

- 1851 Franchise (publication)
- Franchise Industry (sector)
- IFA (company)
- Restaurant Dive (publication)
- Matt Haller (person)
- Federal Trade Commission (regulator)
- franchise regulation (topic)
- ftc rule (topic)
- transparency (topic)
- undisclosed fees (topic)

---
Originally reported by 1851 Franchise (https://1851franchise.com/ftc-targets-undisclosed-franchising-fees-implications-for-the-industry-2726689). Summarized by Burnaze (https://burnaze.com/article/ea0a434c-af9e-4698-aff4-e4f4554b4ff8).