---
title: "Read Item 8 supply restrictions and supplier revenue"
url: "https://ailawframework.com/practice/franchising-and-distribution/check-that-supply-restrictions-and-supplier-benefits-are-in-the-disclosu/united-states"
type: "task_jurisdiction_version"
site: "AI Law Framework"
id: "A34-OB20261022-26-US"
practice_area: "Franchising & Distribution"
tier: "yellow"
lawyer_review: "required"
jurisdictions: ["US"]
last_reviewed: "2026-10-22"
---

# Read Item 8 supply restrictions and supplier revenue

> Extract each Item 8 obligation to buy or lease from the franchisor, its designee, an approved supplier, or under the franchisor's specifications, including obligations imposed by practice.…

Canonical page: https://ailawframework.com/practice/franchising-and-distribution/check-that-supply-restrictions-and-supplier-benefits-are-in-the-disclosu/united-states  
Last reviewed: 2026-10-22

Site index for agents: https://ailawframework.com/llms.txt

## Key facts

| Fact | Value |
| --- | --- |
| Practice area | [Franchising & Distribution](https://ailawframework.com/practice/franchising-and-distribution.md) |
| Human involvement | Yellow: Lawyer and AI draft together |
| How AI is used | Extract each Item 8 obligation to buy or lease from the franchisor, its designee, an approved supplier, or under the franchisor's specifications, including obligations imposed by practice. List supplier-approval steps, officer interests, revenue figures, cooperatives, and any benefit tied to a supplier. Do not approve a supplier. |
| What the lawyer must review | 16 CFR 436.5(h) requires disclosure of the franchisee's obligations to purchase or lease goods, services, supplies, fixtures, equipment, inventory, computer hardware and software, real estate, or comparable items from the franchisor, its designee, suppliers the franchisor approves, or under the franchisor's specifications. The obligation may come from the written agreement or from the franchisor's practice. For each, the item covers the good or service, whether the franchisor or its affiliates are approved or the only approved suppliers, any supplier in which an officer owns an interest, how approval of alternative suppliers is granted and revoked, whether specifications are issued and how they are modified, and whether the franchisor or its affiliates will or may derive revenue or other material consideration, stated on the basis paragraphs (h)(6)(i) through (iv) require. The item also requires the estimated proportion of required purchases and leases, the basis of any payment a designated supplier will make to the franchisor, purchasing or distribution cooperatives, whether the franchisor negotiates purchase arrangements for franchisees, and whether the franchisor provides material benefits based on particular purchases or suppliers. The lawyer checks the disclosure against the agreement and the purchasing practice. ABA Model Rules 1.1 and 5.3 and Formal Opinion 512 leave that check with the lawyer. |
| Written for | United States |
| Applies to | [Check that supply restrictions and supplier benefits are in the disclosure document](https://ailawframework.com/practice/franchising-and-distribution/check-that-supply-restrictions-and-supplier-benefits-are-in-the-disclosu.md) |

## Checking plan

- What the AI does: Extract each Item 8 obligation to buy or lease from the franchisor, its designee, an approved supplier, or under the franchisor's specifications, including obligations imposed by practice. List supplier-approval steps, officer interests, revenue figures, cooperatives, and any benefit tied to a supplier. Do not approve a supplier.
- Basis: Checked against the linked sources on 22 October 2026. Confirm the current instrument before reliance.

## Notes

- Item 8 discloses restrictions and supplier benefits. It does not approve an alternative supplier.
- Revenue disclosure uses the franchisor's total revenue, revenue from required purchases and leases, the percentage of total revenue from those purchases and leases, and affiliates' revenue from sales or leases to franchisees.
- The eCFR page says it is not an official legal edition of the CFR. The May 2008 guide says its advice is not binding on the Commission.

## Sources

- [eCFR, 16 CFR Part 436, Disclosure Requirements and Prohibitions Concerning Franchising](https://www.ecfr.gov/current/title-16/chapter-I/subchapter-D/part-436) (checked 2026-10-22)
- [FTC Franchise Rule Compliance Guide (May 2008)](https://www.ftc.gov/system/files/documents/plain-language/bus70-franchise-rule-compliance-guide.pdf) (checked 2026-10-22)

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*