When offering a franchise for sale in any particular territory, you must comply with the relevant state and federal laws. Federal laws are consistent throughout the nation, but the federal Franchise law allows states to impose greater requirements on franchisors, including registration and additional disclosures.
At Carter & Tani, we provide nationwide representation for franchisors and subfranchisors. Our lawyers have more than 30 years of experience handling legal matters related to franchising.
Contact our offices today to speak with an attorney regarding state franchise laws.
To protect your business interests and prevent unnecessary litigation, it is important to understand the state and federal franchise laws.
The Amended FTC Rule applies to the offer and sale of franchises in all 50 states, but some states also have their own franchise laws that apply to the offer and sale of franchises in their state. These laws give protection to franchisees who reside in the state or establish a franchise business in the state.
If you are a franchisor or subfranchisor, you need to be aware of the state law requirements. You may need to register the franchise and comply with state laws on how franchises are sold.
You cannot offer or sell a franchise in a franchise registration state until you have registered or have met the conditions for an available exemption. Whether your franchise sales activities trigger the applicability of a state franchise law may depend on a number of factors, including:
- Where the franchisor is located,
- Where the offer or sale of the franchise is directed and accepted,
- Where the franchise is to be located, and
- Where the prospective franchisee resides.
In submitting state franchise registration applications, you must follow the 2008 Franchise Registration and Disclosure Guidelines adopted by North American Securities Administrators Association (NASAA). You must comply with any additional state specific disclosure requirements and delivery requirements.
Our attorneys have extensive experience filing state franchise registration applications and obtaining state franchise registrations for our franchisor clients in all of the franchise registration states. We can assist you in the registration process and help you maintain your state registrations.
For franchisees, you should be aware that if you reside in or establish your franchise in any of the registration states, you may have additional protections available to you under the state franchise law.
For general information about state franchise laws, some states offer free publications about buying a franchise, which are listed below. For specific information regarding your individual circumstances though, it is best to speak to an experienced franchise attorney. Contact us today to discuss your legal concerns.
- California: Cal. Department of Corporations, Franchise Division
- Hawaii: Hawaii Department of Commerce and Consumer Affairs
- Illinois: Illinois Attorney General Franchise Information and Publications
- Indiana: Indiana Secretary of State, Securities Division
- Maryland: Maryland Attorney General, Securities Division
- Michigan: Michigan Attorney General - Franchise FAQ
- Minnesota: Minnesota Department of Commerce - Franchises
- New York: New York State Attorney General - Franchise Web Page
- North Dakota: North Dakota Securities Department - Franchise Web Page
- Oregon: Oregon Dept. of Consumer Business Services, Division of Finance & Corporate Securities
- Rhode Island: Rhode Island Dept. of Business Regulation, Division of Securities Regulation, Franchising Section
- South Dakota: S. Dakota Dept. of Revenue & Regulation, Division of Securities, Franchise and Business Opportunities
- Virginia: Virginia State Corporation Commission, Division of Securities and Retail Franchising
- Washington: Department of Financial Institutions, Division of Securities, Franchise Registration and Exemption
- Wisconsin: Wisconsin Dept. of Financial Institutions, Securities & Franchising Division
Contact Carter & Tani to speak with an experienced franchise attorney. We would be happy to schedule an initial consultation regarding your legal concerns related to franchising.
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