Franchise Laws by State
Franchising in the United States is regulated at both the federal and state level. At the federal level, the Federal Trade Commission governs franchise sales through the FTC Franchise Rule, which requires franchisors to provide prospective franchisees with a Franchise Disclosure Document before any franchise agreement is signed or payment is accepted.
Many states also impose their own requirements. Some require franchise registration before offers or sales. Others require notice filings, exemption filings, or compliance with business opportunity laws. A number of states do not require additional filings beyond compliance with federal law.
Because franchise requirements vary significantly by jurisdiction, franchisors expanding into new markets should evaluate the legal requirements in each state before offering franchises, advertising franchise opportunities, accepting applications, or signing franchise agreements.
How Franchise Regulation Works Across the United States
Franchise compliance usually starts with the FTC Franchise Rule, but state law determines whether a franchisor must register, file a notice, claim an exemption, or simply comply with federal disclosure requirements.
Federal Franchise Rule
All franchise sales in the United States are governed by the FTC Franchise Rule. The rule requires delivery of a Franchise Disclosure Document at least fourteen days before signing or payment.
State Registration and Filing
Some states require review and registration before a franchisor may offer or sell. Others require annual filings, notice filings, or exemption filings.
Sales Practice Controls
Even where no state filing is required, franchisors must manage sales practices, FDD delivery, advertising, financial performance representations, and material changes.
Franchise Registration States
Registration states generally require franchisors to submit their FDD for review and registration before offering or selling franchises in that state. Regulators may issue comment letters requiring revisions before granting permission.
Annual Filing States
Some states do not require full franchise registration but do require franchisors to file certain documents or obtain a permit on an annual basis. These filings are usually shorter than full registration reviews.
One Time Filing and Exemption States
In one time filing states, a franchisor may be able to offer and sell franchises with a valid FDD after submitting a notice or exemption filing, subject to changes in state law and continued federal compliance.
Business Opportunity States
Business opportunity laws may apply unless the franchisor has a federally registered trademark or another exemption applies. These rules can be easy to overlook when expanding outside traditional registration states.
Non Registration States
The majority of states do not require franchise registration or filing. Franchisors must still comply with the FTC Franchise Rule and should also consider any applicable relationship laws or business opportunity laws.
Franchise Laws by State Directory
Use this directory as a practical starting point for organizing franchise expansion, registration planning, renewal tracking, and sales team compliance.
Non Registration States
States that generally do not require franchise registration before offering or selling franchises.
- Alabama
- Alaska
- Arizona
- Arkansas
- Colorado
- Delaware
- District of Columbia
- Idaho
- Iowa
- Kansas
- Massachusetts
- Mississippi
- Missouri
- Montana
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Tennessee
- Vermont
- West Virginia
- Wyoming
Franchise Registration States
States that generally require registration before offering or selling franchises.
Business Opportunity States
States where business opportunity laws may require registration, filing, or an exemption analysis.
- Connecticut
- Georgia
- Louisiana
- North Carolina
- South Carolina
- Maine
Annual and One Time Filing States
States with filing obligations that are not usually full franchise registration reviews.
- Florida
- Utah
- Connecticut
- Kentucky
- Nebraska
- Texas
- South Dakota
Franchise Registration States and Filing Fees
The table below identifies primary registration, filing, and exemption jurisdictions along with current government filing fees shown on this page. Filing fees and procedures can change, so franchisors should verify current requirements before submitting filings.
| State | Filing Type | Initial Registration or Filing Fee |
|---|---|---|
| California | Registration | $1,865 |
| Hawaii | Registration | $250 |
| Illinois | Registration | $500 |
| Indiana | Registration | $500 |
| Maryland | Registration | $500 |
| Michigan | Registration | $250 |
| Minnesota | Registration | $400 |
| New York | Registration | $750 |
| North Dakota | Registration | $250 |
| Rhode Island | Registration | $600 |
| South Dakota | Notice Filing | $250 |
| Virginia | Registration | $500 |
| Washington | Registration | $600 |
| Wisconsin | Registration | $400 |
| Texas | Exemption Filing | $25 |
| Florida | Annual Filing | $100 |
| Utah | Annual Filing | $100 |
| Kentucky | Exemption Filing | $150 |
| Nebraska | Exemption Filing | $100 |
| Connecticut | Notice Filing | $100 |
Additional Franchise Costs to Consider
Government filing fees are only one part of the cost of franchise compliance. Franchisors should also plan for electronic filing fees, legal support, and audited financial statements.
Electronic Filing Fees
FRED currently charges a system processing fee for new franchise registration filings, with a separate fee for renewals.
Renewal Processing
Renewal filings submitted through FRED generally include a separate system processing fee in addition to state filing fees.
Franchise Audit
An initial audit for a new franchisor entity often falls within this range, depending on the audit firm, entity structure, and scope.
How Franchise Registration Works
Although each state has its own procedures, most franchise registration matters follow a similar path from FDD preparation through registration and renewal.
Prepare the Franchise Disclosure Document
The FDD must comply with the FTC Franchise Rule and include the 23 disclosure items describing the franchisor, the franchise opportunity, and the legal and financial structure of the system.
Submit the State Filing
In registration states, the franchisor submits the FDD and supporting documents to the regulator with a registration application and filing fee.
Respond to Regulatory Comments
State examiners may review the filing and issue comments requiring corrections, clarifications, or additional disclosures.
Receive Registration Permit
Once comments are resolved, the franchisor receives authorization to offer and sell franchises within that state.
Track Renewals and Material Changes
Most registrations require annual renewal. Material changes may also require FDD updates and state amendments before the next annual filing cycle.
Common Compliance Mistakes Franchisors Make
State franchise compliance problems often arise during expansion, annual updates, sales activity, and coordination between legal, sales, and operations teams.
Selling Before Registration
Marketing, advertising, attending expos, or soliciting prospects in a registration state before a registration permit is issued can create regulatory issues and delay expansion.
Missing Renewal Deadlines
If a registration lapses, the franchisor may be unable to offer or sell in that state until the renewal is filed and permitted.
Failing to Update the FDD
Material changes may require FDD amendments and, in registration states, additional filings with the regulator.
Using the Wrong FDD Version
Sales teams, brokers, or franchise portals may accidentally circulate outdated FDDs unless strict document controls are in place.
Improper Financial Statements
Registration states typically require audited financial statements, and deficiencies can slow or prevent issuance of a permit and state effective date.
Misunderstanding Business Opportunity Laws
Some states regulate franchise offerings through business opportunity statutes, which may require filings, exemptions, or additional disclosures.
Uncontrolled Sales Statements
Statements about revenues, profits, earnings potential, or expected performance must be consistent with the FDD and applicable law.
Poor Internal Coordination
Legal, compliance, and sales teams should work from the same registration status, FDD version, renewal calendar, and approved sales materials.
Navigating Franchise Registration and Compliance
Managing franchise laws and state registration and renewal timelines can feel complicated, especially for emerging franchisors expanding into multiple states. Experienced franchise counsel can help prepare the FDD, manage registrations and renewals, track state deadlines, review sales practices, and coordinate compliance across the franchise development process.
At Waldrop & Colvin, we help franchisors understand federal and state franchise requirements, prepare and update Franchise Disclosure Documents, and manage multistate franchise registration strategy.
Frequently Asked Questions About Franchise Laws by State
These questions help organize common issues franchisors face when planning state expansion and franchise registration strategy.
Do all states require franchise registration?
No. Many states do not require franchise registration or filing, but franchisors must still comply with the FTC Franchise Rule and provide a compliant FDD before signing or accepting payment.
What is a franchise registration state?
A franchise registration state generally requires the franchisor to submit its FDD and related materials to a state regulator and receive permission before offering or selling franchises in that state.
What is the difference between registration and filing?
Registration usually involves regulatory review of the FDD before permission. A filing or notice requirement may be more limited and may not involve the same substantive review.
Do business opportunity laws matter for franchisors?
Yes. In some states, business opportunity laws may apply unless the franchisor qualifies for an exemption, such as an exemption based on a federally registered trademark.
How often do franchise registrations need to be renewed?
Most franchise registrations must be renewed annually. Franchisors should also monitor material changes that may require amendments before the next annual renewal.
Do some states have franchise laws even if they do not require registration?
Yes. Some states regulate franchise relationships even though they do not require franchise registration or filing before a sale. For example, New Jersey does not require franchisors to register their Franchise Disclosure Document, but it has a franchise relationship law that governs termination, nonrenewal, and certain aspects of the franchisor franchisee relationship.
This means a franchisor may be able to offer and sell franchises in the state without prior registration, but must still comply with state specific laws once the franchise relationship exists. These laws can impact termination rights, renewal obligations, transfer restrictions, and good cause requirements. As a result, franchisors should evaluate both registration requirements and relationship laws when expanding into new states.
