Regulatory Guidance & Legal Reference
Business Opportunity Sales & Regulation
Federal FTC Baseline Standards vs. State Seller-Assisted Marketing Plan (SAMP) Frameworks
1. Federal Framework: FTC Business Opportunity Rule (16 C.F.R. Part 437)
| Regulatory Scope | Applies nationally when a seller solicits a buyer to start a business, charges a fee, and offers location/customer assistance, vending placement, or buy-back options. |
|---|---|
| Disclosure Form | Mandates a standardized 1-page Disclosure Document provided at least 7 calendar days before contract signing or payment acceptance. |
| Key Disclosures | Seller background, 10-year civil/criminal litigation history, cancellation & refund policies, and a reference list of recent buyers. |
| Earnings Claims | Optional, but if made, seller must possess written substantiation and supply an Earnings Claim Disclosure Statement detailing achieving percentages. |
| Franchise Carve-Out | Offers fully compliant with the FTC Franchise Rule (16 C.F.R. Part 436) are explicitly exempt from the federal Business Opportunity Rule. |
2. State Statutory Governance (SAMP & Biz Op Laws)
State Filing & Registration
Approximately 25 states enforce specific Business Opportunity / Seller-Assisted Marketing Plan (SAMP) statutes. Sellers must file disclosures and marketing materials with the Secretary of State or Attorney General prior to offering.
Financial Assurance & Surety Bonds
Many regulated states require business opportunity sellers to post a surety bond or establish a trust account (ranging from $25,000 to $100,000+) to secure buyer claims before initiating sales activities within the state.
Buyer Rescission Rights
State laws enforce mandatory "cooling-off" periods (typically 3 to 10 business days), granting buyers explicit statutory rights to cancel contracts and receive a full refund without penalty.
Key Regulated Jurisdictions
Major state statutes governing business opportunity sales include:
- California: SAMP Act (Cal. Civ. Code § 1812.200)
- Florida: Sale of Business Opportunities Act (§ 559.801)
- Texas: Business Opportunity Act (Tex. Bus. & Com. § 51.001)
- Other Regulated States: CT, GA, IL, IN, IA, KY, LA, MD, ME, MI, MN, NE, NH, NC, OH, OK, SC, UT, VA, WA.