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How Do You Franchise? How Do You Franchise?

How Do You Franchise?

  1. Prepare a Franchise Disclosure Document (“FDD”).
    1. Federal Law Requires the FDD in all 50 states!
    2. You must provide answers to 23 specific items.
  2. The FDD must be prepared (and updated) each year.
  3. Prepare a Franchise Agreement.
  4. Prepare an “Operations Manual.”
  5. Comply with State Registration Laws.
    1. Franchise registration and fees required in: California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington and Wisconsin
    2. Other states may require compliance with Business Opportunity Laws
Other Rules to Consider
  1. You must provide the FDD to prospective franchisees at least 14 days before they are asked to sign a contract or pay any money.
  2. Some states require approval of any advertising materials to advertise the sale of a franchise.
  3. Some states regulate the relationship between a franchisor and franchisee and require (or make unlawful) certain provisions in the Franchise Agreement.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.
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