Franchise Broker Regulation Is Coming — What Franchisors Need to Know

On July 28, 2025, NASAA released a proposed Model Franchise Broker Registration Act and opened a 30-day public comment period. If adopted, this model law would give states a framework for regulating franchise brokers and their representatives — a group that, until now, has largely operated without uniform oversight.

You can read the full proposal here. Comments are due by August 27, 2025.

Why Now?

Franchise brokers play a significant role in the sale of franchises, often acting as intermediaries between franchisors and prospective franchisees. While many brokers operate ethically and professionally, a small number of bad actors have caused outsized harm — misleading franchise buyers, misrepresenting earnings potential, and creating confusion about who they actually represent.

These issues have drawn increasing attention from regulators, franchisee advocates, and even franchisors. In fact, the International Franchise Association has publicly supported the idea of broker regulation. The proposed Act is NASAA’s response to these concerns.

What the Proposed Act Would Do

The Model Franchise Broker Registration Act would require:

• Registration of franchise brokers and their representatives with state regulators.
• Disclosure statements to be provided to prospective franchisees before any discussion of a specific franchise opportunity.
• Recordkeeping obligations and potential continuing education requirements.
• Uniform application and disclosure formats, which NASAA envisions states adopting to streamline compliance.

The model is designed to be adopted by any state — even those that don’t currently require franchisor registration.

What Franchisors Should Do Now

If you work with franchise brokers, now is the time to:

• Review the proposed Act and consider how it might affect your sales process.
• Submit comments to NASAA if you have concerns or suggestions. The comment period closes August 27, 2025.
• Start conversations with your brokers about compliance readiness. Even if your state doesn’t adopt the model law right away, others might — and the ripple effects could be significant.

Final Thoughts

Franchise broker regulation is likely coming in some form. Whether or not this model is adopted as-is, the conversation has clearly shifted toward greater oversight. Franchisors, brokers, and franchisees all have a stake in getting this right.