Properties that have one tablet are absent in others. So do not think that if two drugs are similar in appearance, then they have the same effect. .

In this post, I will examine one of the many issues people ask me about in franchising.  That is, what franchise laws should you consider?

As a franchise consultant, I often start the process of franchising your business with a discussion of applicable franchise laws. The Federal Trade Commission is the responsible agency on a federal level. Federal franchise laws are collectively referred to as the FTC Rule on Franchising.

The FTC Rule on Franchising spells out the specific format and information needed.  You’ll want to include this the Franchise Disclosure Document (FDD.) This Rule also requires that when you are franchising your business, no later than the first in-person meeting, each prospective franchisee must receive the company’s FDD.

If you are franchising your business, you should also be aware that currently fifteen states have franchise laws. Typically, the state laws forbid you to offer or sell a franchise in the specific state before registering your FDD with the applicable state agency if you are franchising your business.

For example, the designated state agency in Illinois is the Franchise Bureau in the Office of the Attorney General. Frequently state franchise laws empower regulators to force you to make changes to your FDD.  This happens before you can register your franchise in their state.

These changes can be mandated even if your FDD meets all federal requirements. In most of the fifteen “franchise registration states”, you must complete the state registration before you are allowed to (a) operate your franchise company in that state; (b) grant a franchise to be located in that state or (c) grant a franchise to a resident of that state.

What about State Franchise Laws?

When franchising your business, the fifteen states with state franchise laws include Rhode Island, New York, Maryland, Virginia, Wisconsin, Indiana, Michigan, Illinois, Minnesota, North and South Dakota, Washington, Oregon, California and Hawaii.

Of these franchise registration states, Michigan requires you file a notice and prepare a state-specific cover page.  Oregon does not require a registration. Most franchise registration states require the payment of a fee ranging from $50 to $750. You also have to pay legal fees if you hire an attorney to handle the state registrations on your behalf.

Various states have less burdensome requirements when it comes to selling franchises within their jurisdictions. Some states demand you file a simple application and pay a fee.

Other states, for example, Connecticut and North Carolina, require the payment of a fee and the filing of the company’s FDD if a Franchisor does not have a federally registered trademark.

If you are considering franchising your business, pay attention to both federal franchise laws and any pertinent state franchise laws.

Thinking About Franchising?

NFA Franchise Consultants have the experience to help businesses franchise.  Just watch and listen to some of our client case studies and video testimonials.  We can HELP YOU and it doesn’t cost anything to call and talk to us! 

So, if you are still asking the “should I franchise my business” question over and over with no clear direction, give us a call at (706) 356-5637, or contact us through our online form.  We look forward to helping you take your business to the next level and beyond.