South Dakota Franchise Law
South Dakota is a franchise filing state. Prior to offering or selling a franchise in South Dakota, you must file a notice with a copy of your FDD with the Division of Insurance and Securities Regulation of the South Dakota Department of Labor and Regulation. Your filing is a “notice filing” and South Dakota does not assign an examiner to review your FDD and there is no FDD registration process. The initial South Dakota filing fee is $250 and the annual renewal fee is $150. Your filing must be renewed on an annual basis. If you're filing your registration or renewal electronically, you will incur an additional $100 fee.
To learn more about selling franchises in South Dakota and how we can help with your FDD filing, give us a call at (800) 976-4904 or contact us.
South Dakota Franchise Law
South Dakota is a franchise filing state and is a state that has enacted extensive franchise laws and regulations. Under South Dakota’s franchise laws, before offering or selling a franchise in South Dakota you are required to file a notice that includes a copy of your FDD with the state. Your notice must be renewed on an annual basis and although South Dakota does not review or formally register your FDD, you must certify in your notice that the information contained in your FDD is accurate and without any misrepresentations.
Your filing is effective upon receipt by the director and you should confirm the effectiveness of your filing before offering or selling franchises in South Dakota. Your notice filing must be renewed on an annual basis.
South Dakota Franchise and FDD Filing FAQ’s
Who Regulates Franchises in South Dakota?
The Division of Insurance and Securities Regulation of the South Dakota Department of Labor and Regulation regulates the filing of your Franchise Notice and FDD.
Where are South Dakota FDD Notices Filed?
Your South Dakota Franchise Notice Filing Application must be filed at:
South Dakota Dept. of Labor and Regulation
Division of Insurance
124 S. Euclid Suite 104
Pierre, SD 57501
Their telephone number is (605) 773-5369
What Should I Include with My Franchise Notice Filing?
Your Franchise Notice Filing should include:
Franchise Notice filing application;
Initial filing fee payable to the “South Dakota Division of Securities” in the amount of $250 for initial applications and $150 for annual renewals;
Uniform consent to service of process; and
One clean copy of the FDD in electronic pdf format on a searchable CD.
When Do I Have to Renew My South Dakota Franchise Filing?
The South Dakota franchise notice filing is effective for one year from the date of its receipt by the South Dakota director. Annually, you must renew your filing but you cannot make such renewal filing more than 30 days prior to the renewal date. Post effective amendments are not filed with South Dakota and although your South Dakota notice will be effective for one year, you must nevertheless ensure that not less than 120 days from the end of your fiscal year that your FDD is updated in accordance with the Federal Franchise Rule.
What is a Franchise under South Dakota Law?
Under South Dakota law, in determining whether or not a business relationship constitutes a franchise, the following definition applies:
"Franchise," any continuing commercial relationship or arrangement, whatever it may be called, in which the terms of the offer or contract specify, or the franchise seller promises or represents, orally or in writing, that:
The franchisee will obtain the right to operate a business that is identified or associated with the franchisor's trademark, or to offer, sell, or distribute goods, services, or commodities that are identified or associated with the franchisor's trademark;
The franchisor will exert or has authority to exert a significant degree of control over the franchisee's method of operation, or provide significant assistance in the franchisee's method of operation; and
As a condition of obtaining or commencing operation of the franchise, the franchisee makes a required payment or commits to make a required payment to the franchisor or its affiliate;
Information to File with the South Dakota Department of Labor & Regulation
In order to fulfill the franchise filing requirements in South Dakota, the following information needs to be submitted to the South Dakota Department of Labor & Securities Regulation:
Franchise Disclosure Document (one copy; must be in the format of a searchable CD and in Adobe .pdf format);
Notice filing application;
A uniform consent to service of process;
$250.00 filing fee made payable to the "South Dakota Division of Securities"
South Dakota franchise law requires that filing be renewed no less than annually. The filing fee for the annual renewal is $150.00. Franchisors are not required to submit any additional filings if they update their Franchise Disclosure Document within the year. However, the state does expect the franchisor to make changes to the disclosure document no less than quarterly and provide prospective franchisees with the most up to date copy.
The South Dakota Division of Securities address is: 124 S. Euclid Avenue, Suite 104, Pierre, SD, 57501 and their phone number is (605) 773-4823.
Exemptions to South Dakota Franchise Filing Notice
South Dakota’s franchise laws recognize and exempt the filing notice requirements for: (a) franchise transactions that are governed by the Petroleum Marketing Practices Act; (b) franchise transactions where there are no written documents reciting or evidencing the terms of the franchise relationship; (c) fractional franchises; (d) leased departments; (e) transactions where total consideration from the inception of the franchise relationship through the 6 month anniversary of the franchised business is less than $500; and (f) franchise relationships covering farm machinery, certain motor vehicles, recreational vehicles, mobile homes and manufactured homes. Before relying on an exemption you should carefully review with your attorney whether or not you qualify.
Useful Links Concerning South Dakota Franchise Laws
You may find these links helpful regarding South Dakota franchise laws.
We also recommend visiting our interactive franchise registration map to learn more about state franchise laws, FDD registration states, and required franchise filings.