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When a Franchisor “Goes Dark” — What It Really Means

Filed in Franchise 101 — January 7, 2026

Not all silence in franchising is bad.

One of the most common — and legitimate — reasons a franchisor may pause communication or franchise sales is FDD re-registration. Unfortunately, this period is often misunderstood by prospective franchisees and those exploring brands and interpreted as trouble, instability, or worse.  Why are they “going dark”?  We had to stop the process – is something wrong?

Let’s clear that up.

Not All Silence Is a Red Flag

Every franchisor is required to update and re-register their Franchise Disclosure Document (FDD) annually, typically following their fiscal year-end.

During this compliance window, it’s normal for things to slow down or temporarily stop on the development side of the business.

This is what’s actually happening behind the scenes.

What’s Actually Going On During FDD Re-Registration

Most franchisors must pause franchise sales while their updated FDD is being finalized and approved. During this time:

  • Franchise sales pause
  • Discovery Days may be delayed
  • Development teams go quiet
  • No franchise agreements can legally be signed

This isn’t failure or avoidance — it’s responsible compliance.

A franchisor that continues selling during this period is taking on regulatory and legal risk — for themselves and for the prospective franchisee.  They officially do not have an active FDD – the old is out and the new is being approved. 

Selling franchises with an outdated or unapproved FDD can result in:

  • Regulatory penalties
  • Buyer rescission rights (the ability to unwind the deal)
  • Legal exposure for both parties

That’s why a franchisor who pauses sales during renewal is actually doing the right thing, even if it feels inconvenient or uncomfortable from the outside.

What a Franchisor Updates During FDD Re-Registration

  1. Financial Statements (Item 21)

This is the backbone of the update.

  • Audited balance sheet
  • Income statement
  • Cash flow statement

Why it matters:
This tells you whether the franchisor is financially healthy, stable, or under strain. It’s one of the biggest reasons sales must pause until renewal is complete.  And, all prospective franchisees want updated numbers for their evaluation of the system they are inquiring about.  Wouldn’t you want to know what happened last year?  

  1. Franchise System Growth & Turnover (Item 20)

Updated counts of:

  • New franchise openings
  • Closures
  • Transfers / resales
  • Terminations

Why it matters:
This shows real system momentum (or contraction). Trends here often matter more than headline brand size.  It is important to see sustained growth in the brand with new owners joining and being successful.  Is it ok to see a few close – sure – not all reasons are bad.  Ideally, you want to see growth, increased sales numbers and a healthy system.

  1. Litigation & Bankruptcy Updates (Items 3 & 4)

Any new lawsuits, settlements, or bankruptcies involving:

  • The franchisor
  • Executives
  • Parent or affiliate companies

Why it matters:
Prospective franchisees deserve visibility into legal risk before signing.  Do all have a clean slate – no, but it is good to understand what is going on with your support system.

  1. Fees & Investment Ranges (Items 5–7)

These sections may be updated to reflect:

  • Fee increases or restructuring
  • Changes in required vendors or costs
  • Revised working capital assumptions

Why it matters:
Inflation, labor costs, real estate, and insurance changes often show up here.  As someone interested in becoming an owner, it is imperative you understand the fees associated with launching and growing a new business.  Your financial preparation is a huge factor in success at launch.  

  1. Support, Training, and Operations (Item 11)

Updates may include:

  • Changes to training format or duration
  • Adjustments to field support
  • New technology platforms or systems

Why it matters:
What you’re promised going forward — not what existed two years ago.  Part of being in a franchise system is the frameworks, support and coaching you receive.  You want to ensure you are getting the infrastructure discussed in the evaluation process. 

  1. Earnings Disclosures (Item 19), If Provided

If the franchisor offers a Financial Performance Representation:

  • Data is refreshed
  • Outdated performance groups may be removed
  • New averages or medians may appear

Why it matters:
This is one of the most scrutinized updates — and one of the most regulated.  Franchisors typically only show operating franchise units in the system that have performed for a full 12 months.  You will want to see an update snapshot of the system – while only averages, these numbers should improve year over year as the franchise grows. 

  1.  Agreement & Addendum Changes (Item 22)

Any changes to:

  • Franchise agreement language
  • Addendums
  • State-specific riders

Why it matters:
Even “small” edits can materially affect exit rights, transfer rules, or obligations.

How to Tell Normal Compliance from Real Trouble

The key difference isn’t silence — it’s communication and continuity.

What Normal FDD Re-Registration Looks Like

  • A clear explanation when asked
  • A defined (even if flexible) timeline
  • Ongoing support for existing franchisees
  • Corporate operations continuing as usual

Potential Red Flags to Watch For

  • Vague or evasive answers
  • Support disappearing for current owners
  • No communication or timeline at all
  • Leadership exits layered on top of the silence

Silence paired with transparency is normal.
Silence paired with instability is not.

The “Going Dark” Timeline

The short answer:  anywhere from a few weeks to several months, depending on where the franchisor sells and how much is updated.  Yes, I know – not a clear cut answer.  

Here is why:

States are broken into Non-Registration States, Filing States and Registration States.

Registration States (13) – Approximately 4 – 12 Weeks:

A franchise registration state requires:

  • The FDD to be filed, reviewed, and approved by a state regulator
  • Updates every year (and sometimes mid-year if changes are material)
  • Formal approval before franchise sales can resume
  • California*
  • Hawaii
  • Illinois
  • Indiana
  • Maryland
  • Minnesota
  • New York*
  • North Dakota
  • Rhode Island
  • South Dakota
  • Virginia
  • Washington
  • Wisconsin

*the slowest and most detailed reviewers.  Many times the last states for a franchise to register in.  I have seen these take MONTHS!  So a franchise sales developer is not pressuring you to sign prior to going dark – they may just not have a clue when it will be available again.  

Filing States/Notice Requirements (Not Full Registration) – Approximately 2-4 Weeks:

These states don’t “approve” the FDD but still require notice filings or exemptions that are less restrictive but still regulated, such as:

  • Michigan
  • Texas
  • Florida
  • Kentucky
  • Utah
  • Nebraska

The Bottom Line

The FDD isn’t designed to convince you — it’s designed to protect you and provide you valuable information.  You want the MOST UPDATED possible.

The goal in franchising isn’t to find a business with no risk.
It’s to find one where the risks:

  • Match your goals
  • Fit your lifestyle
  • Align with your tolerance for stress
  • Support your long-term exit plan

Understanding the FDD — is how informed buyers make confident decisions.

Ok, that was A LOT of information.  Want to discuss in more detail?  Jump on my calendar and we can debrief.  My goal is not to “sell” you – it is to educate you so you can make the best decision for your future.  Your success in franchising is my success! *I am not a lawyer and will not provide legal advice or representation.