Franchise Laws by State
Franchising is regulated in all 50 states and all U.S. territories through the federal Franchise Rule. Certain states have enacted franchise specific laws and general business opportunity laws. These state laws impose various duties and obligations on franchisors to follow on a state-by-state basis. Its important to understand the variances in state franchise laws when offering franchise opportunities throughout the United States.
States Regulate the offer and sale of franchise opportunities
Federal law applies in all states; however, each state can supplement law through laws, rules, and regulations. There are 5 separate categories commonly used in franchising to describe the degree of regulation deployed by a particular state. The first step is to determine the appropriate category for the state at issue.
Franchise Registration States
In franchise registration states, a franchisor must generally submit application materials and obtain regulators approval before offering any franchise opportunities.
Annual Filing States
In annual filing states, a franchisor can offer and sale franchises in with a valid FDD if they file an annual notice.
One-time Filing States
In one-time filing states, a franchisor can offer and sale franchises in perpetuity (subject to changes in state law) with a valid FDD after they file a one-time notice.
Business Opportunity States
In business opportunity states, franchisors must register as a business opportunity unless they have a federally registered trademark or another exemption applies.
Non-registration States
In non-registration states, a franchisor can offer and sale franchises on a valid FDD without obtaining any state approval.
What states do not require franchise registration?
The "non-registration states"
- 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
- Virginia
- West Virginia
- Wyoming
What states have business opportunity laws?
The "business opportunity states"
- Connecticut*
- Georgia
- Louisiana
- Maine
- North Carolina
- South Carolina
What states have one-time filing requirements
The "one-time filing states"
- Connecticut*
- Kentucky
- Nebraska
- Texas
You can learn more about the process in certain states by following the links on each list. We are constantly updating our website and adding new content. You call also learn more about the different franchise models on our website. If you have any state specific questions we haven’t addressed or you have general franchise legal questions, please schedule a free 15 minute consultation with a franchise attorney today! We would love to help you on your franchise journey.
