_edited.png){kind=logo}
Most states let you offer a franchise once your FDD is complete. Fourteen require you to register first. Knowing which is which shapes your launch timeline and budget
Three kinds of states
-
Registration states review your FDD and must approve your registration before you advertise, offer or sell a franchise to their residents. Most renew every year.
-
Filing states require a notice or business-opportunity filing, or an exemption filing, before you sell. Several waive it if your main trademark is registered with the USPTO.
-
Non-registration states follow the federal FTC Rule alone. You can begin offering franchises there as soon as your FDD is ready.
The registration states
California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington and Wisconsin.
The filing states
Connecticut, Florida, Kentucky, Maine, Nebraska, North Carolina, South Carolina, Texas and Utah.
What registration involves
-
Submitting your FDD, application forms, audited financials and a filing fee to each state
-
Answering examiner comments, which can take several weeks to a few months
-
Renewing each year and filing amendments when material facts change
-
In some states, escrowing or deferring initial franchise fees until you open the franchisee’s location, especially for newer franchisors
*Disclaimer (Paragraph 3): State requirements, exemptions and fees change often. Confirm current rules with your franchise attorney before offering a franchise in any state.