The franchise laws are a combination of federal and state laws that govern the registration, offer and sale of franchises, and the legal relationship between franchisors and franchisees. The Federal Franchise Rule is the overarching federal franchise law that governs all franchise transactions throughout the United States, in all fifty states. The Federal Franchise Rule is enforced by the Federal Trade Commission and the central requirement of the Federal Franchise Rule and the FTC’s enforcement activities relate to a franchisor’s disclosure of a franchise disclosure document prior to the offer or sale of any franchise.
The Federal Franchise Rule sets the minimum standards for a franchisor’s disclosure obligations and leaves open to each individual state the option to supplement the federal law with state specific franchise laws and requirements. In addition to the Federal Franchise Rule, franchise laws are also comprised of state specific franchise laws and regulation relating to a franchisor’s disclosure obligations, the relationship between franchisor and franchisee and the review and registration franchise disclosure documents.
States that require the registration of a FDD with the local state administrator are known as “franchise registration states”. States that require the filing of a notice or exemption request with a state administrator – but not the registration or filing of a FDD – are known as “franchise filing states“. States that require neither registration nor a filing are typically referred to as “non-registration states”. For additional information about state franchise laws, whether or not a state is a franchise registration state, a filing state, or a non-registration state and the applicable laws of each state, visit state specific franchise laws page.
Within almost every franchise agreement is a choice of law provision where franchisor and franchisee typically agree that the laws of the state where the franchisor is located governs. When it comes to properly disclosing a FDD, at all times, a franchisor must comply with the Federal Franchise Rule and the federal FDD disclosure obligations. When a franchise transaction involves a particular state (i.e., the franchisor is selling franchises from within a particular state, a prospective franchisee is a resident of a particular state, the franchisor is a resident of a particular state or the franchised business will be located within a particular state) then the respective state franchise laws will also govern.
At the federal level the Federal Franchise Rule does not require that a franchisor register or file its FDD with the FTC or any other federal agency. Under federal law a Franchisor must monitor its own internal compliance and ensure that it properly prepares, maintains, issues and discloses its FDD in accordance with the requirements of federal law. If the franchise transaction involves or may involve a franchise registration state then the franchisor must have obtained registration of its FDD with the particular state prior to offering or selling a franchise.
Find out about our Franchise Counsel Program and learn how we can assist your brand in successfully managing your FDD registrations and notice filings. To learn more about particular state franchise laws, visit our state specific franchise laws page.
To learn more about state-by-state franchise registration and filing information visit our interactive franchise registration map. To learn more about how we can assist with the filing and registering of your FDD Contact us at (800) 976-4904 or by email.
In this guide you’ll learn the basics of franchising, how to franchise your business, and how to win at franchising. We’ll also take a deeper dive into legal requirements for franchising and why they matter, steps to take before and after you launch your franchise, and even some tips on... read more
When considering expanding a business both franchising and licensing are possible options. In this guide, you'll learn the differences of franchising and licensing and understand how each will affect you. read more
Are you a successful business owner? Are you looking for ways to expand your business? If so, this article will provide the answers you need to decide whether franchising your business is the right step for you. In short, franchising allows you, the franchisor, to create a relationship among several... read more
Under federal law, prior offering or selling a franchise in any state, franchisors are required to disclose a franchise disclosure document (FDD) to their prospective franchisees. In addition to federal law certain states, including the franchise registration states, require that franchisors register their FDD with the state. The legal documentation... read more
Franchising may be the next big step for your business and, like many other business owners and entrepreneurs, you may have questions like “is my business franchisable?” and “should I franchise my business?” So, how do you know whether or not franchising is right for you? In this guide, we'll... read more
Key strategies to accelerate franchise growth for startup and emerging franchisors In this webinar, franchise attorney Charles Internicola and Nick Powills, founder of No Limit Agency and 1851 Franchise, discuss key strategies to accelerate franchise growth through PR and digital media. Some topics include: Steps franchisors should take when it... read more
One of the biggest issues for emerging franchisors is not having a plan for insurance and system-wide protection. What do emerging brands need to know when they're starting off, who should they rely on, and how can they plan ahead? Get an insurance game plan to protect your franchise system... read more
Key strategies for developing the right logo & trade dress to drive franchise growth with branding and design expert Dan Antonelli. Dan is the author of ‘Building a Big Small Business Brand’ and is the creative director of the branding firm KickCharge Creative. Learn how to drive franchise growth and... read more
With services to make your growth strategy simple, cost effective, and with a team excited to help you, let’s talk about how we can help grow your business.
Fill out the following form and we’ll contact you as soon as possible. To reach our team directly, give us a call at (800) 976-4904.
An attorney client relationship is not established by submitting this initial contact information.