State Franchise Registration Status and Franchise Laws
Oklahoma
Registration or Filing Required? No
Business Opportunity Laws? Yes
Oklahoma is not a franchise registration state nor a franchise filing state, so you may offer or sell your franchise without registering or filing your Franchise Disclosure Document (“FDD”) with the state, provided that you are compliant with the Federal Franchise Rule.
Does Oklahoma Have Business Opportunity Laws?
Yes, Oklahoma has enacted a Business Opportunity Sales Act. The Act defines a business opportunity as an agreement where the seller provides the buyer with products, equipment, supplies or services that enable the buyer to start a business, where the seller represents that it will:
- Provide or assist the buyer in finding locations for vending machines, racks, display cases or devices;
- Provide or assist the buyer in finding outlets or accounts for products or services;
- Purchase some or all of the products made by the buyer;
- Guarantee the buyer will derive income exceeding the purchase price;
- Refund some or all of purchase price, or buy back some or all products, if the buyer is dissatisfied; or
- Provide a marketing plan.
The Act applies to business opportunity sales in which the offer to sell is made or accepted in the state. It also applies to situations in which the buyer is a resident of Oklahoma and the business will be operated in Oklahoma.
Business opportunities must register with the state before offering or selling their opportunities. In order to register, you must submit a copy of your required disclosure document, a consent to service of process, and the $250 filing fee. The registration becomes effective 15 business days after filing the completed documents and is effective for 1 year. Renewing the registration follows the same process, except that the renewal fee is only $150.
Overall, the Act does not impose many additional restrictions on business opportunities, but does generally prohibit any false or misleading information, and deceptive practices.
Are There Exemptions to Registering as a Business Opportunity?
Typically, franchises would meet the definition of a business opportunity because they provide a marketing plan, but the Act specifically exempts franchises so long as they are in compliance with the Federal Franchise Rule. Additionally, the Act provides for numerous other exemptions and exclusions. These exclusions do not fall under the state’s definition of a business opportunity, and include:
- Sales of on-going businesses.
- Sales to an on-going business selling the same products.
- The sale of marketing plan in conjunction with registered trademark provided that seller’s most recent audited financial statements show a net worth exceeding $1 million.
- Sales by executors, administrators, sheriffs, marshals, receivers, trustees in bankruptcy, guardians or conservators, or a judicial offer or sale of a business opportunity.
Additionally, the state has several exemptions that meet the definition of a business opportunity but are also exempt from registration and other requirements related to the Act. The exemptions include:
- The sale of a franchise complying with the FTC rules.
- A sale in which the initial payment is at least $25,000 provided that payment does not exceed 20% of buyer’s net worth.
- A sale in which the payment in first year is $500 or less.
- A sale by a seller who has a net worth of at least $1 million (as evidenced by an audited financial statement).
- A sale in which the buyer’s net worth is at least $250,000.
- A sale to a bank, savings and loan association, trust company, insurance company, credit union or investment company.
- Not-for-profit sales for less than $750 of sales demonstration equipment, materials or samples.
- The purchase of product inventory for $750 or less at wholesale price.
- Businesses operated under a license on the premises of the licensor where the operated business is incidental to licensor’s business.