When does my FDD expire?

Your FDD will expire on a national level 120 days after your fiscal year end. So, if your fiscal year end is December 31, your FDD will expire on April 30. When your FDD expires in a certain state will depend on whether that state’s registration is tied to your fiscal year end or if it is tied the effective date of registration. For example, several states’ registrations also expire 120 days…

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Required Financials for Your FDD

1. What financials are required for a franchisor operating in the United States? The Federal Trade Commission requires audited financials for the franchisor for the last three fiscal years before the Franchise Disclosure Document issuance date. This means you need a balance sheet for the last two fiscal year-ends and a statement of operations, stockholders’ equity, and cash flows for the last…

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Trademarks, Goods and State Lines.

I don’t distribute my goods out of state. Can I still trademark my names? The short answer is YES! The Lanham Act (also known as the Trademark Act of 1946) is the federal statute that governs trademarks. Generally, the Lanham Act requires that a mark is used in interstate commerce before it may be registered as a federal trademark. Thankfully, interstate commerce is broadly defined.…

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Clothing Trademarks – is your trademark a “brand identifier” or just a decoration?

Trademarks are used to identify products. A trademark tells you about the product (usually who made the product and a certain level of quality). In order to file a trademark for clothing, you have to use your trademark to identify the clothing as belonging to the trademarked brand and not as a decoration. Trademarks that are only decorative do not identify and distinguish goods and do not act as…

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To defer, or not to defer, that is the question. A blog on state registration financial assurance options

As most franchisors know, there are 14 states that require a registration of the Franchise Disclosure Document (“FDD”). Of these 14, nine states will review the franchisor’s financial statements and impose financial assurance requirements if the franchisor’s financial health is not up to their standards. These financial reviewing states are: California, Hawaii, Illinois, Maryland, Minnesota,…

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Talent Investment Protection No Poaching No Switching Provisions Under Political Attack

Each franchise system is unique. Training managers and other employees to do things the “system-way” takes time, money and other resources. The more that a franchisee invests in a worker, the more valuable that worker becomes for the franchisee. Unfortunately, that same value makes that worker a potential target for poaching by other system-franchisees; franchisees who want the benefit of…

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