District of Columbia Franchise Registration Status: Non-Registration State
State Registration Fee: $0.00
The District of Columbia is a major hotspot for tourists interested in learning more about our country. Many business and franchise owners believe it is the prime location for certain businesses. The first thing to do when considering expanding into a new area or starting a franchise in the area you are in is to consider what business and franchise laws apply to it.
DC is considered a non-registration state meaning there is no need to register or file information in DC prior to offering or selling a franchise. Regardless of the absence of franchise registration laws in DC, it is still required that your franchise disclosure document (FDD) be in compliance with the Federal Trade Commission Franchise Rule.
Qualifying as a Franchise
The Federal Trade Commission relies on the FTC Rule to administer federal franchise law. The FTC considers a franchise relationship to exist when the franchisor meets the following:
- Allows the franchisee to distribute goods or services in association with the franchise trademark;
- Exerts significant control of, or provides significant assistance to, the franchisees business or method comprising the franchise relationship; and
- Requires fee of a payment by the franchisee.
If you fall into this category it is important to adhere to the FTC's franchise laws.
The Importance of Having a Compliant Franchise Disclosure Document
Your franchise disclosure document is a legal document with disclosures about your franchise business. This document is provided to anyone who is going to be purchasing a franchise from you. The FTC requires that it be provided to the purchaser no later than 14 days prior to the purchase date. Because this is a legal document, it is important to make sure it is compliant with federal laws and the laws of any states that you plan on offering or selling franchises in. Hiring a franchise lawyer to help you with your franchise disclosure document can help you stay compliant with federal and state franchise laws.