Carter & Tani

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September 2017 Archives

What are the Registration and Disclosure Requirements in Franchise Transfers?

Franchisors should not mistakenly assume that a sale of an existing franchise business by the franchise owner is not subject to the registration and disclosure requirements of the franchise laws. When a franchisee is selling its franchise business, is the franchisor obligated to provide the prospective buyer with its current Franchise Disclosure Document? If the franchise business is in a franchise registration state, does the franchisor have to be registered to offer and sell franchises in that state for the franchisee sale/transfer to take place?