Beata Krakus

On May 4, 2026, the North American Securities Administrators Association (NASAA) adopted the Model Franchise Broker Registration Act (the Model Act), a nonbinding framework intended to address regulatory gaps in the oversight of third-party franchise brokers.

The Model Act, which is not law and has not been enacted by any state, is the product of roughly two years of regulator and stakeholder input. It is offered as a template that states may adopt, modify, or decline, and it remains uncertain whether or when any jurisdictions will implement it. The Model Act does not amend or interpret any current state franchise law or the FTC Franchise Rule.

Key Provisions

• Registration: Franchise brokers and their representatives would be required to register with state regulators and renew annually before engaging in franchise sales activity.
• Presale Disclosures: Brokers would be required to provide prospective franchisees with disclosure statements addressing compensation and material litigation before discussing specific opportunities.
• Use of Brokers: Franchisors would be prohibited from using unregistered brokers in states that adopt the Model Act.
• Oversight and Enforcement: Regulators would have authority to deny, suspend, or revoke registrations for misconduct, and registrants would be subject to recordkeeping requirements.

What It Means
While the Model Act imposes no legal obligations at this stage, it signals increased regulatory focus on franchise broker practices and could lead to new compliance requirements if adopted at the state level. Franchisors that rely on third-party brokers, particularly those operating across multiple jurisdictions, should monitor legislative developments and consider evaluating broker relationships, compensation structures, and disclosure practices in anticipation of potential state adoption.

UBG will continue tracking developments in this area and will provide updates. If you have questions and want further information on how this development could affect franchisors and broker relationships, please contact UBG’s Franchise & Distribution team.

The information provided in this alert speaks only to the information and guidance we have available as of the date of publication and is subject to change. This legal update was prepared by UB Greensfelder LLP and is not intended as a substitute for professional legal advice. Receipt, by itself, does not create an attorney-client relationship. For any questions, or for further information, please contact your UB Greensfelder attorney.