Arkansas Franchise Registration Status: Non-Registration State
State Registration Fee: $0.00
The State of Arkansas is not a franchise registration state. This means that Arkansas does not require franchisors to register their Franchise Disclosure Document (“FDD”) with a state regulator before offering or selling a franchise in the state. However, Franchisors must nevertheless maintain and disclose a FDD in accordance with the Federal Franchise Laws prior to offering or selling a franchise in Arkansas.
Although Arkansas does not require franchise registration, Arkansas does regulate franchise relationships through the Arkansas Franchise Practices Act. The Arkansas Franchise Practices Act is comprised of franchise relationship laws that govern aspects of the franchisor-franchisee relationship including issues involving termination, cancellation and non-renewal of franchise relationships.
No, Arkansas is not a registration state and it is not a franchise filing state.
Yes, it does. Arkansas has passed and enacted franchise relationship laws that govern the relationship between franchisors and franchisees. These franchise relationship laws are known as the Arkansas Franchise Practices Act. So, while Franchisor’s are not required to pre-register or file their FDD with an Arkansas state regulator, they must nevertheless ensure that they comply with the Arkansas Franchise Practices Act.
Under the Arkansas Franchise Practices Act, a franchise is defined as follows:
“Franchise” means a written or oral agreement for a definite or indefinite period in which a person grants to another person a license to use a trade name, trademark, service mark, or related characteristic within an exclusive or nonexclusive territory or to sell or distribute goods or services within an exclusive or nonexclusive territory at wholesale or retail, by lease agreement, or otherwise.
The Arkansas definition is expansive in that it focuses on a trademark and the grant of a territory. However the statute does create exemption for traditional retail type businesses that lack a degree of control over the merchandising activities of the store.
As franchise relationship law, the Arkansas Franchise Practices Act is focused on protecting franchisees and affording franchisees certain rights when it comes to the franchisor/franchisee relationship. Some of the areas where this act expands on the rights of franchisees include:
The Arkansas Franchise Practices Act includes a number of additional protections for franchisees. Most important the Act creates private rights of action and remedies for material omissions, false and misleading information given during the franchise sales process. Also franchisor liability exists if the franchisor terminates a franchise without good cause and such liability may extend to a franchisor’s obligation to repurchase a franchised outlet.
Arkansas Secretary of State – This is a link to the official website of the Arkansas Secretary of State.
Arkansas’ Franchise Practices Act – This is a link to the text to the Arkansas Franchise Practices Act.
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