Puerto Rico franchise law is an important topic for anyone buying, selling, or operating a franchise in the state. Puerto Rico is not a franchise registration state, which means franchisors do not need to register their Franchise Disclosure Document (FDD) with the state before offering or selling franchises. The Puerto Rico Dealers Act (Law 75) (Puerto Rico Act 75 of June 24, 1964) provides additional protections for franchisees. At Lopes Law LLC, we advise clients on franchise transactions in Puerto Rico and help them understand both the federal requirements and any state-specific protections that may apply.

This guide covers everything you need to know about Puerto Rico franchise law in 2026: registration requirements, relationship law protections (or lack thereof), the FTC Franchise Rule’s application, and what to focus on before signing a franchise agreement.

Is Puerto Rico a Franchise Registration State?

Puerto Rico is not a franchise registration state. Franchisors do not need to register their FDD with any Puerto Rico state agency before offering or selling franchises. The 14 franchise registration states are California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin. Puerto Rico is not among them.

For a complete overview of all registration states, see our guide to franchise registration states.

What Are the FTC Franchise Rule Requirements in Puerto Rico?

The FTC Franchise Rule (16 C.F.R. Part 436) governs franchise sales in all 50 states and U.S. territories, including Puerto Rico. The core requirements are:

• Complete FDD with 23 mandatory items: Including litigation history (Item 3), fees (Items 5 and 6), territory (Item 12), renewal and termination terms (Item 17), financial performance representations (Item 19, if included), and audited financial statements (Item 21).
• 14-day disclosure timing: The franchisor must deliver the FDD at least 14 calendar days before the prospective franchisee signs any agreement or pays any money.
• No earnings claims outside Item 19: Financial performance representations can only be made through Item 19 of the FDD.
• Annual updates: The FDD must be updated within 120 days of the franchisor’s fiscal year end.

Does Puerto Rico Have a Franchise Relationship Law?

Yes. Puerto Rico provides franchisee protections through the Puerto Rico Dealers Act (Law 75) (Puerto Rico Act 75 of June 24, 1964). This law governs the ongoing relationship between franchisors and franchisees in Puerto Rico and provides statutory protections that go beyond what the FTC Franchise Rule requires.

Key Franchisee Protections

The Puerto Rico Dealers Act (Law 75) provides the following protections for Puerto Rico franchisees:

• Just cause required for termination or non-renewal
• Agreements are considered evergreen regardless of stated term
• Five years of lost profits as statutory damages
• Attorney fees and expert fees recoverable
• Constructive termination (impairment) claims available
• Transfer restrictions cannot constitute just cause for termination

Termination and Non-Renewal Standards

Just cause required. Just cause means nonperformance of essential obligations or actions that adversely and substantially affect the principal’s interests.

What Makes Puerto Rico Unique for Franchise Law?

Puerto Rico Law 75 is arguably the most franchise-protective statute in the U.S. territory system. Distribution agreements are treated as evergreen, and the five-year lost profits formula can result in very large damage awards. Franchisors entering Puerto Rico must understand that this law creates significant long-term obligations.

What Should Puerto Rico Franchise Buyers Focus on Before Signing?

At Lopes Law LLC, here are the items we prioritize when reviewing FDDs for Puerto Rico franchise buyers:

• Item 17: Renewal, termination, transfer, and dispute resolution provisions. Compare these against any Puerto Rico statutory protections.
• Item 12: Territory rights and exclusivity. Understand exactly what territory protection you receive.
• Item 19: Financial performance representations. Analyze the data provided (or note its absence).
• Non-compete provisions: Evaluate the scope, duration, and geographic reach of any non-compete clauses.
• Choice of law and forum selection: Determine which state’s law governs the agreement and where disputes must be resolved.

How Much Does a Franchise Lawyer Cost in Puerto Rico?

At Lopes Law LLC, we use flat-fee pricing for franchise legal services:

• FDD Validation Review: $3,000 flat fee, including all 23 items, franchise agreement analysis, and written report.
• Franchise Dispute Review: $3,000 flat fee for an initial case assessment.
• Franchise Dispute Representation: $5,000 to $10,000+ retainer depending on complexity.

For a complete cost breakdown, see our guide on how much a franchise lawyer costs.

For an overview of all 14 franchise registration states, see our complete guide to franchise registration states. For guidance on what to look for in any FDD, see what an FDD review includes. If you are seeing red flags in your franchise agreement, see franchise agreement red flags your lawyer should catch. For cost information, see how much a franchise lawyer costs.

Reach out, we are friendly. Call now for a free consultation at (267) 777-9117 or schedule your free 20-minute consultation online.