Final answer:
The Federal Trade Commission (FTC) is the federal agency that regulates franchising activities in the United States, enforcing laws and policies to protect consumers and ensure fair business practices within the franchising industry.
Step-by-step explanation:
Federal Agency Regulating Franchising
The federal agency responsible for regulating franchising activities is the Federal Trade Commission (FTC). This agency is tasked with protecting consumers from deceptive and unfair business practices. Additionally, the FTC ensures that businesses adhere to the truth-in-advertising law, and they oversee various aspects of the franchise industry, including the requirement for franchisors to disclose key operating information to prospective franchisees through the Franchise Disclosure Document (FDD).
While the FTC regulates franchising, it is crucial to note the roles of other federal agencies like the FDA, which ensures food and drug safety, and the FCC, which regulates communications. The EPA is tasked with environmental protection, ensuring businesses comply with necessary air and water quality standards. Each of these agencies plays a vital role in complex regulatory frameworks that govern their respective industries and protect the interests of the public.