How the FTC’s New Fee Transparency Rule Impacts Franchise Businesses in Hospitality and Events

In a significant move toward consumer protection and marketplace integrity, the Federal Trade Commission recently passed a new rule mandating that hotels and live-event ticket sellers disclose all fees upfront. This decision, supported by a 4-1 vote goes into effect 120 days after its publication in the Federal Register. The bipartisan measure mandates transparent, all-in pricing—no more surprising resort, service, or convenience fees popping up at checkout. By requiring transparent, all-in pricing from the start, the FTC is reshaping the way franchise systems present, market, and deliver their services.

Rethinking the Franchise Value Proposition

For franchise hotels and event management companies, the era of “junk fees” has long been a double-edged sword. On one hand, add-on charges could boost short-term revenue, but on the other, such costs often eroded customer trust, reduced repeat business, and complicated the franchisor-franchisee relationship. The FTC’s new rule offers franchise systems a chance to stand out for the right reasons, by embracing price clarity as a core component of their value proposition.

Operational Adjustments for Franchisees

Franchise owners in the hospitality sector must now reevaluate how they structure their pricing. Rather than presenting a low base rate and then layering on resort, service, or convenience fees at checkout, all charges must be evident upfront. This shift affects:

1. Booking Platforms and Technology: Franchisors should update reservation systems, property management software, and online booking engines to present fully bundled pricing. This may involve collaborating with tech vendors to adjust how prices are calculated and displayed, reducing the risk of legal trouble.
2. Marketing and Advertising: Marketing teams will need to rewrite promotional content, website copy, and advertisements to show the full price upfront. By doing so, franchises can reframe their messaging around honesty and transparency, attributes that are important to today’s increasingly informed consumers.
3. Franchisee Training and Education: Franchisees are the frontline operators who interact directly with consumers. Providing them with clear guidance on pricing policies, system updates, and customer communication will ensure that every location lives up to the new transparency standards.

Competitive Advantage Through Transparency

The elimination of hidden fees could simplify the decision-making process for both customers and potential franchise investors. By offering a clear, upfront price, franchise brands can position themselves as honest and customer-centric.

Implications for Multi-Brand Franchise Groups

For larger franchise groups operating multiple brands—some in lodging, others in event management—the FTC’s rule makes the importance of consistent pricing policies very clear. This may involve consolidating pricing, refining training programs, and ensuring that every facet of the customer journey meets the new transparency standard. Done right, these changes could enhance the group’s reputation and attract a wider demographic of franchisee candidates who value ethical business practices.

Long-Term Benefits and Challenges

While the immediate administrative and technological adjustments may be time-consuming, the long-term outlook seems promising. Customers weary of post-booking sticker shock may reward franchises that comply quickly and effectively. Increased satisfaction can lead to positive reviews, higher occupancy rates, and improved event ticket sales—resulting in stronger unit-level economics and healthier franchise networks overall.

In an era of heightened regulatory scrutiny, the FTC’s action should be seen as a wake-up call, not just for the lodging and event ticket sectors, but for the entire franchise community. By embracing compliance, clear communication, and consumer trust, franchises can turn a regulatory requirement into a cornerstone of their brand promise.

Jonathan Pace

Senior Franchise Consultant

CEO, BizFranHub