When must a franchisor give a prospective franchisee the disclosure document? Answer in under 100 words. Cite only eCFR (www.ecfr.gov) sources.

Timing Requirement

Under 16 CFR § 436.2(a), the franchisor must furnish the FDD to the prospective franchisee at least 14 calendar days before the prospective franchisee signs a binding agreement with, or makes any payment to, the franchisor or an affiliate in connection with the proposed franchise sale.

Failure to do so is an unfair or deceptive act or practice in violation of Section 5 of the FTC Act (15 U.S.C. § 45).

Methods of Delivery Deemed Timely

Under 16 CFR § 436.2(c), the franchisor has furnished the document by the required date if any of the following occurs:

• A copy was hand-delivered, faxed, emailed, or otherwise delivered to the prospective franchisee by the required date.
• Directions for accessing the document on the Internet were provided to the prospective franchisee by the required date.
• A paper or tangible electronic copy (e.g., CD-ROM) was sent by first-class U.S. mail to the address specified by the prospective franchisee at least three calendar days before the required date.

Related 7-Day Rule for Material Changes

Under 16 CFR § 436.2(b), if a franchisor unilaterally and materially alters the terms and conditions of the basic franchise agreement or any related agreements attached to the disclosure document, the franchisor must furnish the prospective franchisee with a copy of each revised agreement at least 7 calendar days before the prospective franchisee signs the revised agreement. Changes arising out of negotiations initiated by the prospective franchisee do not trigger this 7-day period.