274 Raising Capital A communication system that facilitates a continuing and open dialogue with the franchisees, and as a result reduces the chances for conflict and litigation with the franchise network. National, regional, and local advertising, marketing, and public rela- tions programs designed to both recruit prospective franchisees and attract consumers to the sites operated by franchisees. The Regulation of Franchising The offer and sale of franchises is regulated under federal and state law. Fed- eral franchise law is embodied principally in a regulation promulgated by the Federal Trade Commission (FTC) and commonly referred to by those involved in franchising as the "FTC Rule" (codified at 16 CFR §437). The FTC Rule, which became law in 1979 and was formally titled "Disclosure Requirements and Prohibitions Concerning Franchising and Business Opportunity Ventures," requires franchisors to make certain disclosures to prospective franchisees in the United States and its territories. The FTC Rule applies to product and business-format franchises that have three elements: (1) the franchisee sells