[Read related article: Ultimate Guide to Business Franchising] When concluding a franchise agreement, the franchisee undertakes to comply with certain obligations and regulations in order to use a proven business model; each part of the Treaty contains these provisions. Understanding the concepts and what they mean is essential for a smooth franchise partnership. Some important terms of franchise agreements are listed below. The purpose of this statement is to give the potential investor a realistic view of the proposed transaction with which he or she will begin. Failure to comply with FTC regulations can result in a fine of up to US$10,000 per day for each violation. Before a franchisee signs a contract, the U.S. Federal Trade Commission regulates the disclosure of information under the authority of the franchise. .