States That Require Franchise Registration

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States That Require Franchise Registration

By Pamela Gold

When it comes to franchising, not all states are created equal. Some states require franchisors to register their opportunity. In 35 states in the U.S. a franchisor can immediately sell their opportunity as long as a current UFOC (Uniform Franchise Offering Circular) is provided to the prospective buyer at least 10 business days before any contract is signed and any money is paid. However, for 15 states, there are additional requirements that must be met.

Why Do Certain States Require Franchise Registration?

States that require franchisors to register their opportunity give franchise purchasers legal rights, such as the right to bring a lawsuit upon the franchisor if any state disclosure requirements are violated or omitted. These states have franchise investment laws that require a franchisor to register their UFOC with the state and meet additional disclosure requirements. In these states, the sale of a franchise is treated like the sale of a security -- the states are taking measures to protect investors.

Exemptions Do Apply...

It should be known that many, but not all, states who require franchise registration have exemption laws that may be met by certain franchisors. Generally, a franchisor with a large and stable net worth or a franchisee who has a large net worth may be exempted from standard registration requirements. Again, this law will vary from state-to-state.

Registration States and Corresponding Agencies

In the following 14 states, the corresponding agency is responsible for registering authorized franchises in that particular state:

Department of Corporations
Los Angeles: 213.576.7500
Sacramento: 916.445.7205
San Diego: 619.525.4233
San Francisco: 415.557.3787

Department of Commerce and Consumer Affairs, Securities Compliance, Business Registration Division
Honolulu: 808.586.2722

Office of the Attorney General, Franchise Bureau
Chicago: 312.814.3892

Indiana Securities Division, Franchise Section
Indianapolis: 317.232.6681

Office of the Attorney General of Securities Division
Baltimore: 410.576.7042

Michigan Department of the Attorney General, Consumer Protection Division, Franchise Unit
Lansing: 517.373.7117

Minnesota Department of Commerce, Franchise Examiner
St. Paul:  651.296.6328

New York
New York State Department of Law, Bureau of Investor Protection and Securities
New York: 212.416.8211

North Dakota
Office of the Securities Commissioner, Franchise Examiner
Bismarck: 701.328.4712

Rhode Island
Division of Securities, Chief Securities Examiner
Providence: 401.222.3048

South Dakota
Division of Securities, Franchise Administration
Pierre: 605.773.4823

State Corporation Commission, Division of Securities and Retail Franchising
Richmond: 804.371.9051

Department of Financial Institutions, Securities Division
Olympia: 360.902.8760

Department of Financial Institutions, Division of Securities
Madison: 608.261.9555

Disclosure-Only States
The following state requires that a disclosure be on file only:

Department of Consumer and Business Services, Division of Finance and Corporate Securities
Salem: 503.378.4140

What About Business Opportunities?
The states and the laws referred to in this article are for franchise opportunities only and do not, in any way, regulate the sale or offering of business opportunities. There are currently business opportunity laws and regulations on both national and state levels.