The rules
What sellers of money-making programs have to follow.
The FTC’s Business Opportunity Rule, the Franchise Rule, where earnings claim rules stand, MLM guidance, and the Impersonation Rule.
The Business Opportunity Rule
-
What counts as a business opportunity
Under the FTC's Business Opportunity Rule, a deal is covered when a seller pitches you on starting a new business, you're required to pay, and the seller says it (or someone it recommends) will provide locations, outlets, accounts or customers, or buy back what you produce.
Source: eCFR, 16 CFR 437.1 (Business Opportunity Rule definitions)
-
One-page disclosure, 7 days before you pay
If a program is covered, the seller has to give you a one-page Disclosure Document at least seven days before you sign a contract or pay any money.
-
What the disclosure form tells you
The form has to show who the seller is, whether the company or key people faced certain fraud or deception cases in the past 10 years, whether there's a cancellation or refund policy, whether earnings claims were made, and contact info for at least 10 past buyers.
-
Earnings claims need written proof
It's illegal for a covered seller to make an earnings claim without written materials on hand to back it up, and the seller has to make that proof available to you or the FTC if asked.
-
The Earnings Claim Statement
A covered seller that makes an earnings claim has to give you a separate Earnings Claim Statement that includes how many buyers, and what percentage, got at least the claimed result.
-
Franchises are handled separately
The Business Opportunity Rule generally doesn't apply to deals that meet the definition of a franchise.
Franchises
-
Franchise Rule: 14 days and 23 items
Franchises fall under the FTC's Franchise Rule instead. You must get the Franchise Disclosure Document, which has 23 numbered items, at least 14 days before you're asked to sign or pay.
-
Franchise earnings claims go in Item 19
A franchisor doesn't have to share earnings information, but any claims it makes about sales, income or profits must appear in Item 19 of its disclosure document.
Status, September 2026
Earnings claim rules: where they stand
-
2022: earnings claims rulemaking opens
On March 11, 2022, the FTC published an advance notice asking the public whether it should write a rule on deceptive or unfair marketing that uses earnings claims.
Source: Federal Register, Deceptive or Unfair Earnings Claims (advance notice of proposed rulemaking)
-
2022: expanding the bizopp rule considered
On November 25, 2022, the FTC asked for comment on whether the Business Opportunity Rule should be extended to business coaching, work-from-home, investment coaching and ecommerce programs it doesn't currently cover.
-
January 2025: two proposed rules
On January 13, 2025, the FTC announced two proposed rules. One would expand the Business Opportunity Rule to money-making opportunities like business coaching and investment opportunities, and the other would create a new Earnings Claim Rule for MLMs.
-
The 2025 proposals passed 3-2
The Commission approved the January 2025 proposals by a 3-2 vote. Commissioners Andrew Ferguson, who is now the FTC's Chairman, and Melissa Holyoak voted no.
-
Status: no final earnings claim rule
There's no final FTC earnings claim rule. The federal regulatory agenda says the January 2025 proposal was released but never published in the Federal Register, lists the rulemaking at the pre-rule stage, and says the FTC is still evaluating options.
Source: Reginfo.gov Unified Agenda, Earnings Claims Trade Regulation Rule (RIN 3084-AB70)
-
Still listed in August 2026
The FTC's regulatory agenda published in the Federal Register on August 14, 2026, still lists the Business Opportunity Rule and the proposed Earnings Claims rule among rulemakings likely to have some impact on small entities.
Source: Federal Register, FTC Regulatory Agenda (August 2026)
MLM earnings claims
-
MLM claims must match typical results
FTC business guidance says MLM earnings claims should reflect what a typical participant is likely to earn, should account for expenses, and can't be fixed with a 'results not typical' disclaimer.
Source: FTC, Business Guidance Concerning Multi-Level Marketing
-
What MLM income disclosures show
A 2024 FTC staff review of 70 MLM income disclosure statements found most participants made $1,000 or less a year, and that figure may not account for expenses.
Source: FTC Business Blog, FTC staff report analyzes 70 MLM income disclosure statements
-
Notice of Penalty Offenses on money-making claims
In 2021, the FTC issued a Notice of Penalty Offenses on money-making opportunities. It lists practices the FTC has found unfair or deceptive in earlier litigated cases.
Source: FTC, Penalty Offenses Concerning Money-Making Opportunities
Pretending to be someone else
-
Impersonation Rule took effect in 2024
The FTC's rule against impersonating government agencies and businesses took effect April 1, 2024. It lets the FTC go to federal court to seek money back for people and civil penalties from violators.
Source: FTC press release, FTC Announces Impersonation Rule Goes into Effect Today
-
Fake business ties are covered
The Impersonation Rule also makes it illegal to materially misrepresent an affiliation with a business, including a claimed endorsement or sponsorship.
Source: eCFR, 16 CFR 461.3 (Impersonation of businesses prohibited)