Illinois Franchise Registration

Illinois is a Franchise Registration State. The initial FDD filing fee is $500 and the annual FDD renewal fee is $100.

Illinois Franchise Law

Illinois is a franchise registration state. Before offering or selling a franchise, you must register your FDD with the Franchise Bureau of the Illinois Attorney General’s Office. The Illinois Attorney General is responsible for enforcing Illinois’s franchise laws, which are known as the Illinois Franchise Disclosure Act. Your Illinois FDD and FDD registration must be updated and renewed no less frequently than annually, within the earlier of the one-year anniversary of your FDD registration or 120 days from the end of your fiscal year.

To learn more about registering your franchise in Illinois and how we can help get your FDD registered, give us a call at (800) 976-4904 or contact us.

Illinois Franchise and FDD Registration FAQs

Who Regulates Franchises in Illinois?

The Franchise Bureau of the Illinois Attorney General regulates and oversees enforcement of the Illinois Franchise Disclosure Act, including mandatory FDD registration requirements and compliance with Illinois’s franchise relationship laws.

What Should I Include with My FDD Registration Application?

Your initial FDD registration application should include the following forms and documents:

• Filing fee of $500 payable to the State of Illinois;
• Cover letter stating the name of the applicant;
• Uniform Franchise Registration Application Page;
• Supplemental Information Page;
• Sales Agent Disclosure Form for each sales agent employment by or affiliated with the applicant;
• Uniform Consent to Service of Process naming the Illinois Attorney General as agent to receive service, with corporate, individual, or partnership acknowledgment;
• Certification Page;
• Auditor’s consent letter granting consent to use each audited report in the registration; and
• Uniform Franchise Offering circular in duplicate, current within 120 days and in compliance with UFOC Guidelines. Updated information pertaining to Items 20 or 21 may be submitted as an exhibit without changing the information already in these items.

What Are the Fees for Franchise Applications in Illinois?

The Initial FDD Registration Fee is $500 and the annual FDD Renewal Fee is $100.

Where Do I Mail My FDD Registration Application?

Your FDD registration application should be mailed to the following address:
Franchise Bureau of the Illinois Attorney General

500 South Second Street
Springfield, IL 62706.

The telephone number for the Franchise Bureau is (217) 782–4465.

How Long Will It Take for My Registration Application to Be Approved?

Once your registration application is fully submitted, a Franchise Examiner will be assigned to review your application and the disclosures contained in your FDD. Illinois examiners are quite thorough in their review of FDDs and FDD applications.

Once your application is received by the Franchise Bureau, a Franchise Examiner will be assigned to your application and you should expect an initial response within 21 days. The initial response that you will receive from your assigned Franchise Examiner will, most likely, advise you of FDD revisions required by the Examiner. Many of these revisions will relate to Illinois’s Franchise Disclosure Act and the requirements of Illinois’s franchise relationship laws. Upon satisfaction of the Examiner’s conditions, you will receive a written notice acknowledging that registration is granted. The Examiner’s notice will also advise you of the registration effective date and the registration renewal date.

Ultimately, the length of time it will take for your registration application to be approved will depend on the completeness of your FDD and how timely you respond to the Examiner’s comments. Typically, you should expect the process to take 8 weeks.

What Franchise Transactions Require Illinois FDD Registration?

Illinois FDD registration requirements and the Illinois Franchise Registration Disclosure Act apply where either: (a) the franchisee resides in Illinois (even if the franchised business will be located outside the state of Illinois), or (b) the offer of the franchise is made or accepted in Illinois and the franchised business is or will be located within the state.

Does Illinois Impose Financial Assurance Requirements?

If during the FDD registration or renewal process the Illinois examiner determines that your franchise company possesses insufficient capital and equity, the Illinois examiner will impose financial assurance requirements as a condition for your FDD registration. Common financial assurance requirements include your agreement to defer the initial franchise fees, escrowing the initial franchise fee, or the posting of a bond. Many times you will have the ability to choose between the three of these options however, in practice, deferral of the initial franchise fee is the most expedient and available option for start-up and emerging franchisors.

Does Illinois Have Franchise Relationship Laws?

Yes. The Illinois Franchise Registration Disclosure Act includes franchise relationship provisions that govern the relationship between franchisor and franchisee and that prohibit certain actions on the part of the franchisor. Some franchisor-franchisee relationship issues governed by the Illinois Franchise Registration Disclosure Act include:

• Trade Associations – In Illinois, it is illegal for a franchisor to prevent or restrict a franchisee from joining a trade association;
• No Disparate Treatment – In Illinois, it is illegal for a franchisor to “unreasonably and materially discriminate between franchisees operating a franchised business located in [Illinois] in the charges offered or made for franchise fees, royalties, goods, services, equipment, rentals or other advertising services, if such discrimination will cause competitive harm to a franchisee who competes with a franchisee that received the benefit of the discrimination….” Exceptions to this rule are limited, but do include disparate treatment based on the franchises being granted at different times, and other limited exceptions.
• Termination Restrictions – In Illinois, it is illegal to terminate a franchise without good cause. Generally, under Illinois law, good cause exists when a franchisee has been given a 30-day notice of a violation of the franchise agreement and the franchisee has not cured its default.
• Nonrenewal Restrictions – Generally, in Illinois, it is unlawful to deny a franchisee renewal of its franchise in circumstances where the franchisee will be prohibited from operating a competing business after expiration of the original franchise agreement. Also, it is illegal to deny a franchisee renewal without giving the franchisee 6 months’ prior notice of your election to deny renewal.

Useful Links Concerning Illinois Franchise Laws

• Illinois Franchise Disclosure Act – This is a link to the text of the Illinois Franchise Disclosure Act as published by the State of Illinois.
• Illinois Attorney General Franchise Information and Publications – This resource page is published by the Franchise Bureau of the Illinois Attorney General and includes helpful information and links to Illinois’s franchise rules and franchise forms, including FDD registration applications.

MORE INFORMATION

Visit our interactive franchise registration map and learn more about state franchise laws, FDD registration states, and required franchise filings.

To learn more about how we can help register your FDD in Illinois and throughout the United States, contact us at (800) 976-4904 or contact us online.