16 CFR § 437.8 - Franchise exemption.

---
identifier: "/us/cfr/t16/s437.8"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "16 CFR § 437.8 - Franchise exemption."
title_number: 16
title_name: "Commercial Practices"
section_number: "437.8"
section_name: "Franchise exemption."
chapter_name: "FEDERAL TRADE COMMISSION"
subchapter_number: "D"
subchapter_name: "TRADE REGULATION RULES"
part_number: "437"
part_name: "BUSINESS OPPORTUNITY RULE"
positive_law: false
currency: "2026-04-05"
last_updated: "2026-04-05"
format_version: "1.1.0"
generator: "[email protected]"
authority: "15 U.S.C. 41-58."
regulatory_source: "76 FR 76860, Dec. 8, 2011, unless otherwise noted."
cfr_part: "437"
---


# 437.8 Franchise exemption.

The provisions of this Rule shall not apply to any business opportunity that constitutes a “franchise,” as defined in the Franchise Rule, 16 CFR part 436; *provided, however,* that the provisions of this Rule shall apply to any such franchise if it is exempted from the provisions of part 436 because, either:

(a) Under § 436.8(a)(1), the total of the required payments or commitments to make a required payment, to the franchisor or an affiliate that are made any time from before to within six months after commencing operation of the franchisee's business is less than $500, or

(b) Under § 436.8(a)(7), there is no written document describing any material term or aspect of the relationship or arrangement.