The FTC Business Opportunity Rule Starts a 7-Day Payment Clock

If you sell people a way to start their own business, and you promise to find them the customers, the locations or the buyers, there is a federal rule that controls when you may take their money. The FTC's Business Opportunity Rule requires a written disclosure document to reach the buyer at least seven calendar days before they sign anything or pay anything. A card charged on the first sales call, before that document has been delivered and the week has passed, is a payment the rule says should not have happened yet.

This guide covers who the rule applies to, what the disclosure document must contain, how it limits earnings claims, and what the FTC's recent cases against "done-for-you" ecommerce store sellers show about how it is enforced. It also covers why the rule matters to the bank behind your merchant account. The rule text is from the Electronic Code of Federal Regulations (16 CFR Part 437) as of October 2026.

Who the rule covers

The rule does not cover everyone who sells training or business advice. It applies to a "business opportunity", which the rule defines as a commercial arrangement with three parts:

1. The seller solicits a prospective purchaser to enter into a new business, meaning one they are not already in, or a new line or type of business.
2. The purchaser makes a required payment.
3. The seller, expressly or by implication, orally or in writing, represents that the seller or someone it designates will do one of three things: provide locations for equipment, displays or vending machines the purchaser owns or pays for; provide outlets, accounts or customers for the purchaser's goods or services, including internet outlets, accounts or customers; or buy back what the purchaser makes or provides, such as paying for envelopes stuffed at home.

Classic examples are vending machine routes, display rack programs and work-at-home schemes. The internet wording in the definition is what brings in the modern version: a seller who promises to set up and run an online store for the buyer and fill it with customers.

Two details decide many borderline cases. First, "providing locations, outlets, accounts, or customers" includes recommending or requiring a locator or lead-generation company, or collecting a fee on its behalf, but the rule says advertising and general advice about business development and training do not count. A course that teaches people how to find their own customers is generally outside the rule. A program that promises to supply them is inside it. Second, a "required payment" covers everything the buyer must pay the seller or an affiliate to get or start the business, directly or through a third party, but not payments for reasonable amounts of inventory at bona fide wholesale prices for resale.

Franchises are carved out. The rule does not apply to an arrangement that is a franchise under the FTC's Franchise Rule (16 CFR Part 436), except for franchises exempt from that rule because total required payments within the first six months are under $500 or because there is no written document describing the relationship. Those fall back under the Business Opportunity Rule.

The seven-day rule

Section 437.2 is the part that touches payments directly. A seller must furnish the disclosure document, and the earnings claim statement if it makes earnings claims, in writing at least seven calendar days before the earlier of two events: the prospective purchaser signing any contract in connection with the sale, or making a payment or providing other consideration to the seller, directly or indirectly through a third party.

In practice:

• A deposit, a reservation fee or a "first installment" is a payment. The clock has to run before any of them.
• Paying through a third party does not get around it. The rule's wording covers payments made indirectly, and its definition of a required payment covers money that reaches the seller through someone else.
• "In writing" includes email and documents posted online, as long as they can be downloaded, printed or preserved. A phone conversation alone does not count.
• A disclosure document sent the same day as a closing call, followed by a charge, does not meet the rule however complete the document is.

For a sales team that closes on the phone, the operational answer is to separate the two events. The first call ends with the disclosure document being sent and the purchaser's receipt recorded. Any agreement and any charge happen no earlier than seven calendar days later.

What the disclosure document contains

The disclosure document is a single written document in a form the rule prescribes. The English wording is in Appendix A to Part 437 and a Spanish version is in Appendix B. If the sale is conducted in another language, the seller must use an accurate translation. Under section 437.3 it must state:

• Identifying information: the seller's name, business address and telephone number, the salesperson's name, and the date the document is furnished.
• Earnings claims: a yes or no box. If yes, the earnings claim statement is attached.
• Legal actions: whether the seller, any affiliate or prior business, or any officer, director or sales manager has been the subject of a civil or criminal action for misrepresentation, fraud, securities law violations or unfair or deceptive practices, including FTC rule violations, in the past 10 years. Each action is listed by its full caption.
• Cancellation or refund policy: whether one is offered and, if so, all of its material terms.
• References: the name, state and telephone number of purchasers from the past three years, or at least the 10 nearest to the prospective purchaser, with a statement that a buyer's own contact information may be given to future prospects.
• Receipt: a duplicate copy for the purchaser to sign and date and return.

The document must be updated at least quarterly, and the reference list monthly until the seller has 10 purchasers. Nothing beyond what the rule requires or permits may be added to it. In an electronic version, scroll bars and internal links are allowed but audio, video, animation and pop-ups are not. The seller also may not disclaim the document or ask the buyer to waive reliance on it, and may not say anything in the sales pitch that contradicts it.

Earnings claims need numbers behind them

An earnings claim under the rule is any representation of a specific level or range of actual or potential sales, income or profit. The definition includes charts and calculators, and statements from which a buyer can reasonably infer a minimum income. The rule's own examples are "earn enough to buy a Porsche," "earn a six-figure income" and "earn your investment back within one year."

A seller that makes an earnings claim to a prospective purchaser must have a reasonable basis and written substantiation for it when the claim is made, must make that substantiation available on request to the buyer and the FTC, and must give the buyer an earnings claim statement. That statement must carry the heading "EARNINGS CLAIM STATEMENT REQUIRED BY LAW" and give, among other things, the dates the earnings were achieved and the number and percentage of all purchasers up to that date who earned at least the stated amount.

Claims in the general media, which the rule defines to include television, radio, print, the internet, websites, commercial bulk email and mobile communications, must state the same dates and the same number and percentage of purchasers in immediate conjunction with the claim. An ad that says "our clients make $10,000 a month" without them is a violation on its face.

Sellers must keep each materially different version of the disclosure document, each purchaser's signed receipt, each executed contract and all earnings claim substantiation for three years (section 437.7).

What the FTC's recent cases show

The FTC has used the rule against sellers of automated ecommerce stores, a model built on the promise to supply customers through Amazon, Walmart or TikTok storefronts.

Click Profit

In a complaint filed on March 3, 2025 in the Southern District of Florida, the FTC alleged that Click Profit and related companies promised consumers "passive income" from AI-powered online stores, charged a "management fee" of at least $45,000 plus thousands more for inventory, and took at least $14 million. The complaint says that at no point did Click Profit give prospective purchasers a disclosure document with its litigation history, prior purchasers' contact information, cancellation and refund policy, or an earnings claim statement. It charged separate counts for misrepresenting earnings, the missing disclosure document, earnings claims without an earnings claim statement and earnings claims in the general media. The court granted a temporary restraining order on March 5, 2025, and the FTC announced in August 2025 that the case had resulted in the operators being permanently banned from the industry.

Ascend Ecom

In a complaint filed on September 9, 2024 in the Central District of California, the FTC alleged that Ascend Ecom and its owners claimed AI-powered tools would help consumers earn thousands of dollars a month, and that the operation took at least $25 million. The complaint says that after June 2023 Ascend typically did not give prospective purchasers a document disclosing the lawsuits against it. It also describes how clients paid: they were usually directed to wire their initial payments to an Ascend bank account, and customers who wanted to pay by card were typically told Ascend did not accept card payments. In June 2025 the FTC announced a settlement banning the defendants from selling business opportunities or business coaching, with a $25 million judgment partially suspended on their inability to pay.

Both complaints also say consumers were left with credit card debt, in Ascend's case from cards used to fund store inventory. These are the FTC's allegations. The cases ended in settlements rather than findings after trial.

Why your processor cares

The rule is enforced by the FTC, not the card networks, but its consequences reach the merchant account. An FTC trade regulation rule carries civil penalties for knowing violations. The maximum under Section 5(m)(1)(A) of the FTC Act is $53,088 per violation, the 2025 level, which the FTC said in a September 15, 2026 Federal Register notice would stay unchanged for 2026. Rule violations also let the FTC seek refunds for consumers under Section 19 of the FTC Act, which became more important after the Supreme Court held in AMG Capital Management v. FTC (2021) that Section 13(b) does not authorize monetary relief. In both cases above, the settlements required the operators to turn over assets to compensate consumers.

For an acquirer, that combination is the risk. A business opportunity seller takes large single payments, on the strength of earnings promises, for a result the buyer will not see for months. When the result does not come, buyers ask for refunds or dispute the charges, and an FTC case can follow with the seller's money tied up in it. That is why business opportunity sellers are underwritten as high risk, and why an underwriter will read your sales funnel as closely as your processing statements.

The rule also does not stand alone. It does not preempt state business opportunity laws that give buyers equal or greater protection, such as registration of disclosure documents, though state disclosures must be in a separate document. And in January 2025 the FTC proposed expanding the rule to cover a wider range of money-making opportunities, including business coaching. As of October 2026 that proposal has not become a final rule, so the current Part 437 is what applies.

A checklist before you apply for a merchant account

1. Decide whether you are covered. If you promise or arrange locations, outlets, accounts or customers, or buy back what the purchaser produces, assume you are, and have counsel confirm it.
2. Prepare the Appendix A disclosure document, with your litigation history, refund policy and references, and put the quarterly update on a calendar.
3. Audit every earnings claim on your website, ads, webinars and sales scripts. Remove any you cannot substantiate in writing, and add the required dates and purchaser percentages to the rest.
4. Build the seven-day gap into your sales process and your payment flow, so that no contract, deposit or card authorization happens until seven calendar days after the document was furnished. Record the delivery date and keep the signed receipt.
5. Write your refund and cancellation terms once, put them in the disclosure document, and honour them. Failing to refund when a purchaser meets the disclosed terms is itself a violation (section 437.6(l)).
6. Keep the records the rule requires for three years. The same signed receipts, contracts and refund terms are what you will need to answer a chargeback.
7. Check the business opportunity laws of every state where you sell.

An underwriter reviewing a business opportunity application will typically want to see the disclosure document, the earnings substantiation and the sales process that enforces the seven-day wait. Having them ready makes the application easier to place, and it puts the seller on the right side of the rule the FTC has been enforcing in these cases.