FDD Filing and Registration in the State of Texas: Franchise and Business Opportunity Requirements
Franchise Registration Status: Franchise Filing State
State Registration Fee: $25.00
The State of Texas is not a franchise registration state. This means that prior to offering or selling a franchise in Texas you do not need to register your Franchise Disclosure Document (“FDD”). However, because Texas has enacted Business Opportunity Laws, Franchisors are required to file a Business Opportunity Exemption notice with the Texas Secretary of State.
The Texas Business Opportunity Act governs the offer and sale of business opportunities in the State of Texas, requires that business opportunities be registered with the State, and requires a pre-sale disclosure similar to a FDD. As a franchisor, if your FDD is current and in compliance the franchise rules and regulations of the Federal Trade Commission, you may claim an exemption to Texas' business opportunity laws by filing a one-time "Business Opportunity Exemption Notice".
To learn more about registering your FDD in Texas and how we can help, give us a call at (800) 976-4904 or contact us.
Texas Franchise and Business Opportunity FAQs
Who Regulates Franchises in Texas?
Texas has not enacted franchise laws but has enacted business opportunity laws and the Texas Secretary of State regulates and oversees the enforcement of Texas' Business Opportunity Act.
Does the Texas Business Opportunity Act Apply to Franchises?
The definition of a "business opportunity" under the Texas Business Opportunity Act is broad and includes franchise relationships. However, if you maintain a current and valid FDD and are in compliance with the Federal Franchise Rule (Learn more about the Federal Franchise Rule) and the FTC's FDD disclosure requirements, you may claim an exemption to Texas' Business Opportunity Laws. Once an exemption notice is filed, you will be in compliance with Texas' Business Opportunity Laws.
What Should I Include with my Filing?
You are required to file the Business Opportunity Exemption Notice that is referred to as Form 2703 and, when filed, provides the Texas Secretary of State with the required information necessary to claim an exemption to the Business Opportunity Investment Act. Information included in the exemption notice:
- The name of your franchise company;
- Any assumed names of your franchise system;
- The principal business address of your franchise company;
- Authorized signature affirming that your franchise offering is in compliance with the Federal Franchise Rule and regulations issued by the FTC; and
- Check payable Secretary of State in the amount of $25, representing the exemption notice filing fee.
Where is the Exemption Notice Filed?
Business opportunity exemption notices are sent to:
Texas Secretary of State
P.O. Box 13193
Austin, TX 787-3193
What if I Don't Have a Current or Compliant FDD?
Then the exemption will be invalid and you will be required to comply with Texas' Business Opportunity Act which required registration of your Business Opportunity and a pre-sales disclosure process.
Helpful Links Concerning Texas' Franchise and Business Opportunity Laws:
- Texas Business Opportunity Act - This is a link to the actual text of the Texas Business Opportunity Act as published by the Texas Secretary of State. The Act defines what constitutes a business opportunity, registration and disclosure requirements imposed on sellers of business opportunities, and the exemption for franchisors.
- Business Opportunity FAQ's - This FAQ section is published by the Texas Secretary of State and includes helpful information about the regulation of business opportunities, including the registration process and the exemption process for franchisors.
To learn more about state-by-state information for franchising, visit our page on state franchise laws. For more information on our Franchise Counsel Program and how we can help get your FDD registered and ready to sell contact us at (800) 976-4904 or contact us.