020 P-1
                         SUPPLEMENT DATED MARCH 27, 2002
                              TO THE PROSPECTUS OF
                          FRANKLIN FLOATING RATE TRUST
                             DATED DECEMBER 1, 2001

The prospectus is amended as follows:

I. The  "Who  Manages  the  Fund?"  section  on page 30 is  replaced  with  the
following:

 WHO MANAGES THE FUND?

 THE  BOARD. The  Board  oversees  the  management  of the Fund and elects its
 officers. The officers are responsible for the Fund's day-to-day operations.

 INVESTMENT  MANAGER. Franklin  Advisers,  Inc. manages the Fund's assets. The
 manager also performs  similar  services for other funds.  It is wholly owned
 by  Resources,  a publicly  owned company  engaged in the financial  services
 industry through its subsidiaries.  Charles B. Johnson and Rupert H. Johnson,
 Jr. are the principal  shareholders of Resources.  Together,  the manager and
 its  affiliates  manage over $266 billion in assets.  Please see  "Investment
 Management and Other  Services" and  "Miscellaneous  Information"  in the SAI
 for information on securities transactions.

 PORTFOLIO MANAGERS.

 Richard C. D'Addario
 Senior Vice President of Franklin Advisers, Inc.

 Mr.  D'Addario is a Vice  President of the Fund and has been a manager of the
 Fund since 2000. He joined  Franklin  Advisers,  Inc. in 1996. Mr.  D'Addario
 was formerly  Director of Banking & Finance for Soros Fund Management and for
 13 years a vice  president at Citibank where he was  responsible  for lending
 to  companies  in the  corporate  middle  market  and  investment  management
 industries. He is a Chartered Financial Analyst (CFA) Level II candidate.

 Chauncey F. Lufkin
 Executive Vice President of Franklin Advisers, Inc.
 Mr.  Lufkin  is a Vice  President  of the Fund  and has  been  the  portfolio
 manager  of the Fund since its  inception.  Mr.  Lufkin has been a  portfolio
 manager of Franklin  Advisers,  Inc.  since 1990. He was formerly an employee
 of  Manufacturers  Hanover Trust Co. (now J.P. Morgan Chase & Co.),  where he
 worked in the  Acquisition  Finance Group  specializing  in  structuring  and
 negotiation of leveraged  transactions,  and formerly an employee of Security
 Pacific National Bank (now Bank of America).

 Richard S. Hsu CFA,
 Vice President of Franklin Advisers, Inc.
 Mr. Hsu is an Assistant Vice President of the Fund and has been a manager of
 the Fund since 2000. He joined Franklin Templeton Investments in 1996. He is a
 Chartered Financial Analyst (CFA). He is also a member of the Security Analysts
 of San Francisco (SASF) and the Association for Investment Management and
 Research (AIMR). Mr. Hsu has received both a bachelor of arts degree with
 honors and a master of arts degree from Stanford University.

 MANAGEMENT FEES.  For the fiscal year ended July 31, 2001, management fees
 before any advance waiver were 0.80% of the average net assets of the Fund.
 Under an agreement by  the manager to reduce its fees to reflect reduced
 services resulting from the  Fund's investing in a Franklin Templeton money
 fund, the Fund paid 0.78% of its  average net assets to the manager for its
 services. This reduction is required by the Fund's Board and an exemptive
 order by the Securities and Exchange Commission.

               Please keep this supplement for future reference.