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South Carolina is not a Franchise Registration State, it is a Franchise Filing State.
The State of South Carolina is not a franchise registration state but is a franchise filing state. South Carolina has enacted Business Opportunity Laws that apply to the sale of franchises, and before offering or selling a franchise in the state, you must first determine whether or not your franchise system maintains a registered trademark. If your system maintains a registered trademark, then you may be exempt from South Carolina’s Business Opportunity Laws and the only recommended filing with the State is a notice to the South Carolina Secretary of State where you advise of your intention to offer or sell franchises in the state and you request a “no action letter” exempting your franchise offering from South Carolina’s business opportunity requirements. If you do not have a registered mark, in addition to your FDD disclosure obligations, you may also be required to register your franchise offering as a South Carolina business opportunity.
The franchise notice requirement is triggered by South Carolina’s Business Opportunity Sales Act. Under this act, the term “business opportunity” is broadly defined and, in many instances, includes franchise offerings. However, franchisors with a federal- or state-registered trademark may claim exemption from South Carolina’s Business Opportunity Sales Act. But to ensure compliance, filing notice with the South Carolina Secretary of State is the proper course of action.
The South Carolina Secretary of State is charged with enforcing South Carolina’s Business Opportunity Sales Act and, because the definition of a “business opportunity” may include a franchise offering, the Secretary of State is the governing agency for franchisors.
Franchise and business opportunity notices are sent to:
South Carolina Secretary of State
1205 Pendleton Street, Suite 525
Columbia, South Carolina 29201
Attn: Business Opportunities Division
Telephone Number: (803) 734-0367
Because if your franchise system maintains a registered trademark, then you may claim an exemption to South Carolina’s Business Opportunity Laws. To do so, you should submit a letter (i.e., a “notice”) to the South Carolina Secretary of State where you submit proof that your system maintains a registered mark and request exemption from South Carolina’s business opportunity registration requirements.
It depends. If your franchise system maintains a registered trademark, then your filing should be in the form of a letter to the South Carolina Secretary of State (Business Opportunities Division) where you advise them of your intention to offer and sell franchises, the registration status of your trademarks, and your request for a business opportunity exemption. If you do not maintain a registered trademark, you should contact the Secretary of State and determine whether or not you will be required to register and file as a business opportunity.
If you maintain a registered mark, you will most likely receive a “No Action Letter” where you are advised that the Secretary of State “will not require you to register and file disclosures as a business opportunity in the State of South Carolina.”
You will be required to file and register your franchise offering as a business opportunity under the South Carolina Business Opportunity Sales Act.
Yes. In fact, it is South Carolina’s Business Opportunity Laws that trigger the franchise notice requirement and, potentially, the registering of your franchise offering as a business opportunity.
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 you with your franchise registrations and growing your franchise in South Carolina and across the United States, contact us at (718) 979-8688 or contact us.
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