Finding Out About The Laws That Affects Franchises

AllBusiness:

The Federal Trade Commission’s Web site provides a wealth of information regarding the
Franchise and Business Opportunities Rule and all the laws affecting franchises. It’s divided into sections covering:

Regulatory Reform (Franchise Rulemaking),

Regulatory Reform (Franchise Rule Review),

Before You Buy,

Consumer Alert,

Your Legal Rights (Guide to the FTC Franchise Rule),

Franchise Rule Text, State Disclosure Requirements,

Know the Risks,

How to Comply, and

Franchise and Business Opportunity FAQs.

15 states have franchise investment laws that require franchisors to provide pre-sale disclosures, known as ‘offering circulars,’ to potential purchasers. The FTC discusses the state offices administering franchise disclosure laws. Some of these state laws treat the sale of a franchise like the sale of a security, and typically prohibit the offer or sale of a franchise within their state until a franchise offering circular has been filed on the public record with, and registered by, a designated state agency. 2 of the states do not require a filing of offering circulars, as noted in the list of state offices below:

California (filing required)

Hawaii (filing required)

Illinois (filing required)

Indiana (filing required)

Maryland (filing required)

Michigan (only notice required)

Minnesota (filing required)

New York (filing required)

North Dakota (filing required)

Oregon (no filing)

Rhode Island (filing required)

South Dakota (filing required)

Virginia (filing required)

Washington (filing required)

Wisconsin (filing required)

FranchisingLaw.com provides a most informative and detailed explanation of the laws affecting franchises on its Web site. The names of the state agencies regulating franchises, along with addresses and telephone numbers are also provided.