Michigan Franchise Law
Michigan is general consisdered a registration state, but it functions similar to a notice filing state for franchise sales. Instead of submitting a Franchise Disclosure Document for state review, franchisors typically file an annual Notice of Intent with the Michigan Department of Attorney General before offering or selling franchises in the state.
The Michigan Notice of Intent is a short letter style filing submitted with a $250 annual filing fee. Although Michigan does not require submission of the FDD, the state remains enforcement focused and the Michigan Franchise Investment Law provides meaningful remedies for non compliance.
Michigan is often misunderstood because the filing itself is short and the FDD is not submitted. The filing may be simple, but the legal consequences for non compliance can be significant.
How Michigan Franchise Registration Works
Michigan requires franchisors to register to sell franchises through an annual Notice of Intent filing. The state does not conduct the same pre sale FDD review used by traditional registration states, but franchisors must still comply with federal disclosure rules and Michigan franchise law.
Notice of Intent Filing
Before offering or selling franchises in Michigan, a franchisor typically files a Notice of Intent with the Michigan Department of Attorney General.
No FDD Submission
Michigan is a notice only state. The Department of Attorney General does not review Franchise Disclosure Documents for compliance with state or federal law.
Annual Filing Obligation
The Notice of Intent must be filed annually. Franchisors should calendar the Michigan filing separately from full registration state renewals.
Michigan Notice of Intent Filing Process
The Michigan filing is shorter than a full registration application, but it should still be handled carefully. The filing is typically prepared in letter format and submitted with the required filing fee.
| Requirement | Michigan Filing Detail | Practical Note |
|---|---|---|
| Filing document | Notice of Intent | Prepared as a letter on the franchisor’s company letterhead (or on their franchise attorney's firm letterhead). |
| Copies | Two copies | Franchisors typically submit two copies of the Notice of Intent filing. |
| Filing fee | $250 | The filing fee is paid annually and is payable to the State of Michigan. |
| FDD submission | Not required | Michigan does not require the franchisor to submit the FDD for notice filing. |
| Frequency | Annual | The Notice of Intent should be filed each year before continuing Michigan franchise sales activity. |
Prepare the Notice of Intent
The notice is typically prepared on franchisor letterhead and includes the franchisor’s legal name, any business or trade name, principal business address, and a brief description of the franchised business.
Submit Two Copies
Franchisors typically submit two copies of the Notice of Intent in letter format to the Michigan Department of Attorney General, Corporate Oversight Division, Franchise Section.
Pay the $250 Filing Fee
The annual filing fee is $250 and should be submitted with the Notice of Intent. The check is made payable to the State of Michigan.
Track Annual Filing
Michigan requires franchisors to file the Notice of Intent each year. This should be built into the franchisor’s annual FDD update and state compliance calendar.
Maintain FDD and Sales Compliance
Even though the FDD is not submitted to Michigan, franchisors must still comply with the FTC Franchise Rule, Michigan law, and accurate sales practice requirements.
Michigan Statutory Penalties and Enforcement
Michigan’s notice filing process is less burdensome than full FDD review, but the statutory punishment scheme for non compliance can be significant. The state’s enforcement posture is designed to protect Michigan residents even though the FDD is not reviewed before sale.
Civil Penalties
Failure to comply with Michigan franchise filing and disclosure requirements can expose a franchisor to statutory penalties, including daily penalties in certain circumstances.
Rescission Exposure
Michigan franchisees may have statutory remedies that can include rescission based on violations of the Michigan Franchise Investment Law.
Damages and Fees
Non compliance may create exposure for damages, interest, costs, and attorneys’ fees depending on the facts and the statutory basis for the claim.
Michigan Required Notices and FDD Placement
Michigan presents a practical drafting issue because the required Michigan notices are not always handled the same way as state addenda used for traditional registration states.
Michigan Notice Language
Michigan requires specific notice language for franchise disclosures and agreements. These notices are intended to alert Michigan franchisees to statutory protections and limitations on certain franchise agreement provisions.
Placement Tension
Many state specific provisions are placed in an exhibit or state addendum near the back of the FDD packet. Michigan practice can create a conflict because the required notice language is often better placed toward the front of the FDD packet for visibility.
Practical Best Practice
For Michigan, a practical approach is to include the required Michigan notices at or near the front of the FDD packet rather than burying them only in an exhibit. This helps reduce risk and makes the Michigan notices easier for prospects and reviewers to identify. Most franchise attorneys place this just behind the other mandated cover pages and risk factors (around the 4th page).
Why Michigan Is Still a Serious Compliance State
Michigan does not require FDD submission, but franchisors should not treat it as an informal or low risk jurisdiction. Its structure shifts emphasis from pre filing review to post sale enforcement and statutory remedies.
No Pre Sale FDD Review
The state does not review the FDD for compliance before the franchisor sells in Michigan. That means the burden remains on the franchisor to get the disclosures right.
Resident Protection Focus
Michigan’s statutory scheme is designed to protect Michigan residents and franchisees through required notices, prohibited practices, and remedies after violations occur.
Sales Team Controls Still Matter
Franchisors must still control earnings claims, FDD delivery timing, advertising, broker activity, and statements made to Michigan prospects.
Common Michigan Franchise Compliance Issues
Michigan compliance problems often arise because the filing appears simple. Franchisors should maintain the same discipline they use for traditional registration states.
Missing Notice of Intent
Offering or selling in Michigan without filing the annual Notice of Intent can create enforcement and statutory remedy risk.
Late Annual Filing
The Notice of Intent should be filed each year before continuing franchise sales activity in Michigan.
Incorrect Notice Placement
Michigan notices should be easy to identify. Burying the language only in a back end exhibit may create unnecessary risk.
Assuming No FDD Review Means No Risk
The fact that Michigan does not review the FDD does not reduce the franchisor’s responsibility for accurate and compliant disclosures.
Improper Earnings Claims
Financial performance statements must be properly supported and included in Item 19, consistent with federal franchise law.
Outdated FDD
Michigan prospects should receive a current FDD that accurately reflects the franchisor’s offering and required Michigan notices.
Uncontrolled Broker Activity
Franchise brokers and sales representatives should understand Michigan timing and disclosure requirements before communicating with prospects.
No Compliance Calendar
Michigan’s annual Notice of Intent should be tracked alongside FDD updates, franchise renewals, and other state filings.
Michigan Franchise Compliance Support
Waldrop & Colvin helps franchisors prepare Michigan Notice of Intent filings, update required Michigan FDD notices, evaluate statutory compliance issues, and manage franchise sales compliance across notice filing and registration states.
For emerging franchisors, Michigan is a good example of why state franchise compliance is not only about how much paperwork must be filed. Even when the filing is short, the legal consequences of getting the process wrong can be significant.
Michigan Franchise Law FAQ
Common questions about Michigan franchise notice filings, FDD submission, filing fees, required notices, and enforcement risk.
Is Michigan a franchise registration state?
Michigan is commonly treated as a franchise notice filing state. Franchisors typically file an annual Notice of Intent with the Michigan Department of Attorney General before offering or selling franchises in the state.
Does Michigan require franchisors to submit the FDD?
No. Michigan does not require franchisors to submit the Franchise Disclosure Document for state review. The Department of Attorney General states that it does not review FDDs for compliance with state or federal law.
What is the Michigan Notice of Intent filing fee?
The Michigan Notice of Intent filing fee is $250, payable to the State of Michigan.
How often is the Michigan Notice of Intent filed?
The Notice of Intent is filed annually. Franchisors should file each year before continuing franchise sales activity in Michigan.
What is included in the Michigan Notice of Intent?
The Notice of Intent is typically prepared on company letterhead and includes the franchisor’s name, any business name or dba, principal business address, and a brief description of the franchised business.
Why does Michigan still matter if the FDD is not reviewed?
Michigan remains important because it has statutory remedies, required notices, and enforcement tools designed to protect Michigan franchisees and residents. No FDD submission does not mean no compliance risk.
Where should Michigan notices appear in the FDD packet?
Because Michigan required notices should be prominent, a practical best practice is to include them at or near the front of the FDD packet rather than only placing them in a back end state addendum exhibit. Generally, around the 4th page, just behind the special risks to consider page.
