A material change is any significant event or development that makes information in the Franchise Disclosure Document inaccurate, incomplete or misleading. When a material change occurs, the franchisor must update the FDD to ensure all disclosures remain current and accurate under the FTC Franchise Rule and state franchise laws.
Material changes may trigger immediate amendment requirements in both non registration and registration states.
Material changes protect franchise buyers by ensuring they receive truthful and current information before making an investment decision. For franchisors, timely updates:
prevent unlawful sales
maintain compliance with state and federal law
ensure accurate information is disclosed to prospects
avoid potential rescission claims or penalties
protect the integrity of the sales process
Failure to amend the FDD after a material change is one of the most common compliance violations.
A change is usually material if it would influence a prospect’s investment decision. Examples include:
increase in fees
changes to territory structures
introduction of new required technology or vendors
updates to financial performance representations
major litigation or settlements
management departures
significant changes in system size
updated financial statements
new marketing fund obligations
changes to the form of the franchise agreement
Registration states may interpret materiality more broadly.
A franchisor must amend the FDD:
immediately when a material change occurs in a non registration state; and
by submitting an amendment filing in any registration state where the franchisor is active
In some states, the franchisor must receive approval before continuing franchise sales.
Registration states require:
an amended filing
state review and comment
an updated effective date before sales can resume
States may impose penalties if sales occur after a material change without proper amendment.
Franchise Registration State
FDD Renewal
Material Change
Franchise Examiner
Franchise Exemption
Notice Filing State
Non Registration State
Stop Order
Franchise Registration Management
Franchise Territory Mapping
Integrated Document Signing
CRM Tools
Franchise Disclosure Requirements: What Every Franchisor Needs to Know
2025 Guide to Franchise Registration States in the U.S.
State Franchise Registration: What Franchisors Need to Know Before Expanding
Zors Improves Franchise Registration Tracking With Color-Coded Map Status
Why a Federally Registered Trademark Matters When Offering Franchise Opportunities
E-Signature Integration with a Territory-Centric CRM Is a Game-Changer
Last updated: November 25, 2025
