Franchise Opportunities in Colorado
Colorado Franchise Laws
Are Franchises Regulated in Colorado?
Franchise opportunities are regulated in every state and are subject to the federal franchise rule. Additionally, states impose all sorts of laws that effect the way businesses operate. However, these state laws generally apply to all businesses or to certain industries and are not specific to the franchise model. The more pertinent question is, is Colorado a franchise registration state? Meaning, do they require franchisors to apply for approval before offering franchises in their state? In certain states, franchisors cannot do business until state regulators authorize the franchisor to conduct business in their state.
Is Colorado a franchise registration state
No. Colorado is a non-registration state for franchisors. There are no franchise specific laws in Colorado. This means Franchisors can offer and sale franchises in Colorado once they have issued a Franchise Disclosure Document in compliance with the federal Franchise Rule. Franchise attorneys provide nationwide support.
What Federal Laws Effect Franchises?
Franchise opportunities are regulated on the federal level through the Federal Franchise Rule. The rules imposed by federal law apply to all states and provinces in the United States. We provide an overview of federal franchise law. There are a few basic things that anyone considering a franchise, or considering becoming a franchisor, must know.
The offer of a franchise opportunity can only occur through disclosure of a franchise disclosure document (the “FDD”). The requirements for disclosure documents are laid out in the federal franchise rule and cover 23 separate items. The FDD must be provided and receipt must be acknowledge.
The franchise rules require a 14-day waiting period between the prospect receiving the FDD and signing any agreement or exchanging any funds. The rule requires these periods to ensure prospects have sufficient time to evaluate any franchise opportunity.
In addition to the 14-day waiting period, franchisors are required to observe a 7-day waiting period if there are certain changes made to teh franchise agreement. In practice, many franchisors observe this period after producing the final agreement.
