Franchise Registration

In 1978, the Federal Trade Commission (FTC) enacted the “Franchise Rule”. The Franchise Rule, as amended, requires a franchisors’ franchise disclosure document (FDD) provide prospective purchasers with adequate disclosure to make an informed decision before entering into a franchise agreement. What is the FDD?

In addition to the federal requirement regulated by the FTC, most states have their own unique laws to govern franchises (or business opportunities) operating in their state. A number of “registration states” have enacted franchise disclosure laws, imposing state-specific disclosure requirements that supersede the FTC’s Franchise Rule requirements.

State Requirements

Franchise Registration States

The franchise registration states are states that, in addition to the Franchise Rule, have issued supplemental franchise laws that require franchisors to register their FDD with the state’s examiner and pay a fee, and be effectively registered in the state before offering or selling a franchise within the state. The franchise registration states are:

  • California
  • Hawaii
  • Illinois
  • Indiana
  • Maryland
  • Michigan
  • Minnesota
  • New York
  • North Dakota
  • Rhode Island
  • Virginia
  • Washington
  • Wisconsin

Franchise Filing States

Filing states require franchisors to submit their FDD with the state, and pay a fee. In most instances the filing is simply a notice with the state and unlike the franchise registration states, the franchise filing states typically do not examine and review the FDD. The franchise filing states are:

  • Connecticut
  • Florida
  • Kentucky
  • Nebraska
  • North Carolina
  • South Carolina
  • South Dakota
  • Texas
  • Utah

Franchise Non-Registration States

Franchise non-registration states require FTC disclosure compliance (the “ FDD”), a federally registered trademark, presentation of a notice filing and a fee payment before you can begin offering to sell your franchise business within the state. The franchise non-registration states are:

  • Alabama
  • Alaska
  • Arizona
  • Arkansas
  • Colorado
  • Delaware
  • District of Columbia
  • Georgia
  • Iowa
  • Kansas
  • Louisiana
  • Massachusetts
  • Mississippi
  • Missouri
  • Montana
  • Nevada
  • New Hampshire
  • New Jersey
  • New Mexico
  • Ohio
  • Oklahoma
  • Oregon
  • Pennsylvania
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