Franchise Registration Made Simple
The Federal Trade Commission, or FTC, is charged with the oversight of franchising in a plethora of states. The prerequisite to establishing any nationwide franchise is proper registration within states which necessitate the aforementioned registration.
The Registration Process
Regardless of a franchisor’s experience or size, the registration process can be the cause of worry for many franchisors. The process entails a rigorous review of all franchise disclosure documents by an established state oversight agency in every instance in which a franchisor attempts to contract with a potential franchisee. Furthermore, a number of states stipulate several variations of franchise registration accompanied by different disclosure policy. It is not uncommon for these varied states to impose an obligatory annual registration to maintain franchise compliance.
As previously mentioned, each individual franchise disclosure document is reviewed by state oversight agencies to ensure its compliance with overarching state regulations. It is commonplace for the state itself to provide commentary on any given document or even go so far as ensuring that a franchisor’s terms and provisions are concise and clear. Moreover, the franchisor may even be required to resubmit any documentation post-consideration of the commentary provided by the oversight body. The aforementioned process can be time-consuming, to say the least, lasting months if mishandled.
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