Steps to Register a Franchise Disclosure Document (FDD)
Under the franchise laws a franchisor must issue and properly disclose Franchise Disclosure Document (FDD) before offering or selling a franchise. At the federal level and, in many states, there is no requirement to register an FDD. In the 13 states referred to as the franchise registration states, a franchisor must first register its FDD with the state franchise regulator before offering or selling a franchise in the state and, in the 9 states referred to as the franchise filing states, a franchisor must first file a notice with the designated state regulator before offering or selling a franchise within the state.
The Steps involved in registering your FDD or filing your FDD at the state level, include:
1. Identify the State(s) Involved in the Franchise Sale – First determine the state(s) that are involved in your franchise sale. Consider that more than one state may be involved and factors that you should evaluate with your legal counsel include: (a) the state where the franchised business will be established; (b) the franchisee’s state of residence, (c) any state where franchise sales activities / negotiations occurred, and (d) the state from which your franchise company operates.
2. Determine each States Franchise Registration and Filing Status – Determine the FDD registration and filing status of the state(s) involved in your franchise sale.
3. Register / File your FDD – If a state involved in your franchise sale is a franchise registration state you must file a Uniform Franchise Registration Application with the designated state franchise regulator. You must include with your application a copy of your FDD and payment for the state’s registration fee. Once the application is received it will be reviewed by a state regulator. The process and fees vary on a state-by-state basis and are outlined below. Likewise, for franchise filing states, each state requires a different notification and process that must be followed.
Below is a summary of the franchise registration states, the franchise filing states, the state regulators involved, how long FDD registration takes, and the application process.
We can help you timely and cost-effectively register your FDD and keep your franchise sales up and running. To learn more contact us at (800) 976-4904 or by email.
Franchise Registration States
For franchisors that have a federally registered trademark: the franchise registration states are California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, Virginia, Washington, and Wisconsin. Each registration state designates a particular entity to regulate and oversee the franchise registration process and requires annual FDD registration. Reference to a federally registered trademark refers to the primary trademarks of your franchise system.
- California: your FDD must be registered with the California Department of Corporations;
- Hawaii: your FDD must be registered with the Business Registration Division of the Department of Commerce and Consumer Affairs;
- Illinois: your FDD must be registered with the Franchise Bureau of the Illinois Attorney General;
- Indiana: your FDD must be registered with the Securities Division of the Indiana Secretary of State;
- Maryland: your FDD must be registered with the Maryland Attorney General;
- Michigan: you must file a notice and register with the Michigan Secretary of State;
- Minnesota: your FDD must be registered with the Securities Division of the Minnesota Department of Commerce;
- New York: your FDD must be registered with the New York Attorney General;
- North Dakota: your FDD must be registered with the North Dakota Securities Department;
- Rhode Island: your FDD must be registered with the Rhode Island Department of Business Regulation;
- Virginia: your FDD must be registered with Virginia Corporation Commission;
- Washington: your FDD must be registered with the Securities Division of the Washington State Department of Financial Institutions; and
- Wisconsin: your FDD must be registered with the Securities Division of the Wisconsin Department of Financial Institutions.
Additional Registration States if you do not have a federally registered trademark: in addition to the above-listed franchise registration states, if your primary trademarks are not registered with the United States Patent and Trademark Office (the “USPTO”) then you must also register you FDD Connecticut, North Carolina, South Carolina, and Maine.
- Connecticut: your FDD must be registered with the Connecticut Department of Banking;
- North Carolina: your FDD must be registered with the North Carolina Secretary of State;
- South Carolina: your FDD must be registered with the South Carolina Secretary of State; and
- Maine: You must register as a business opportunity with Maine’s Office of Securities.
Although each franchise registration state has adopted its own regulations and requirements, the application process itself is uniform and standardized franchise registration applications, forms, and instructions are published by the North American Securities Administrators Association (NASAA).
Franchise Filing States
For franchisors that have a federally registered trademark: the the franchise filing states are Connecticut, Florida, Kentucky, Nebraska, North Carolina, South Carolina, South Dakota, Texas, and Utah.
- Florida: an annual franchise exemption must be filed with the Florida Department of Agriculture and Consumer Services;
- South Dakota: an annual notice must be filed with the South Dakota Dept. of Labor & Regulation;
- Utah: an annual notice must be filed with the Utah Division of Consumer protection;
- Connecticut: a one-time exemption notice must be filed with the Connecticut Department of Banking;
- Kentucky: a one-time exemption notice must be filed with the Office of the Kentucky Attorney General;
- Nebraska: a one-time exemption notice must be filed with the Nebraska Department of Banking and Finance;
- North Carolina: a one-time exemption notice must be filed with the North Carolina Secretary of State;
- South Carolina: a one-time exemption notice should be filed with the South Carolina Secretary of State;
- Texas: a one-time exemption notice must be filed with the Texas Secretary of State.
Additional Filing States if you do not have a federally registered trademark: in addition to the above-listed franchise filing states if your primary trademarks are not registered with the USPTO then you must also file with Georgia and Louisiana. These filings are limited to the filing of a consent to service of process.
- Georgia: a one-time filing of a Consent to Service of Process with the Georgia Secretary of State.
- Louisiana: a one-time filing of a Consent to Service of Process with the Louisiana Secretary of State.
How Long Does FDD Registration Take?
Timing varies from state to state and FDD registration can take anywhere from 20 days to three months depending on the completeness of your FDD and the time of year it is filed. Learn more about when FDD’s expire and require renewal.
Uniform Franchise Registration Application
Although each franchise registration state lists and identifies its franchise registration requirements, forms, and filing fees; the forms and instructions upon which your registration application will be based are published by NASAA. There is variation among the states regarding certain disclosure requirements and supplements to the NASAA forms. Generally, your franchise registration application will include the following forms:
- Uniform Franchise Registration Application page with data on the franchisor;
- Certification page or “signature page”;
- Consent to Service of Process;
- Sales Agent Disclosure Form and the new Franchise Seller Disclosure Form;
- Supplemental Information Form;
- Copies of all advertising or promotional literature proposed to be used in the state;
- Two paper copies of the disclosure document;
- An auditors’ consent; and
- Application fee.
As a franchisor, you need to understand the franchise registration process. Failure to comply with and properly manage state franchise registrations will harm your franchise sales process and may create significant franchise liability exposure.
To learn more about state-by-state franchise registration and filing information visit our interactive franchise registration map. To learn more about how we can assist with the filing and registering of your FDD Contact us at (800) 976-4904 or by email.