Franchise Questions
When can I sell in registration states with my updated FDD?
I’ve just issued my FDD and want to start selling franchises with it. What are the next steps?
This depends on where you’d like to sell franchises. Registration states require you to file your FDD and pay a fee, and most of these states have a formal comment letter process. Before you can start selling in the registration states, you’ll need to receive an acknowledgement or permit from the state.
In the rest of the states, you’ll need to pay attention to business opportunity laws before getting started. Some states require you file an exemption notice, and others require you to have a registered trademark in order to avoid business opportunity laws.
The chart below shows the initial requirements for the states and jurisdictions that fall under the federal rule.
I’ve just made my annual updates to the FDD. Now what?
Once you’ve made annual updates and issued your new FDD, you must stop marketing and selling franchises (i.e. “go dark”) in all of the registration states except California until you receive a renewal acknowledgement or permit. California lets you market your franchise while examiners review your renewal, but you can’t close any sales. In the non-registration states, some of the states require you re-file the business opportunity exemption notice each year.
Keep in mind that when you’ve issued your updated FDD, the old FDD is dead and can’t be used. This means that any prospects in the pipeline need to get the new FDD and a fresh 14-day period to review the new FDD before you accept money or sign any agreements.
The chart below shows the requirements during your renewal period.
Here is a chart showing the registration or filing state’s expiration timelines:
| State | Initial Filing Requirements | Offers and Sales During Renewal Periods |
|---|---|---|
| Alabama | No franchise or business opportunity registration is required. | N/A |
| Alaska | No franchise or business opportunity registration is required. | N/A |
| Arizona | No franchise or business opportunity registration is required. | N/A |
| Arkansas | No franchise or business opportunity registration is required. | N/A |
| California | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. | A franchisor may offer (BUT NOT SELL) a franchise while an application for renewal or amendment is pending if the prospective franchisee receives the following: The FDD as filed.Written statement from the franchisor that:• The filing has been made, but is not effective;• The information in the FDD and exhibits has not been reviewed by the commissioner; and• The franchisor will deliver to the prospective franchisee an effective FDD and exhibits at least 14 days prior to execution by the prospective franchisee of a binding agreement or payment, showing all changes from the FDD originally received by the prospective franchisee.The effective FDD showing all changes from the FDD originally received by the prospective franchisee. |
| Colorado | No franchise or business opportunity registration is required. | N/A |
| Connecticut | If the federal trademark registration is owned by a third party, the trademark registration and license agreement must be filed. Franchisors with a federal registered trademark are exempt from registration. Franchisors without a federal registered trademark must register as a business opportunity. | N/A |
| Delaware | No franchise or business opportunity registration is required. | N/A |
| District of Columbia | No franchise or business opportunity registration is required. | N/A |
| Florida | Business Opportunity exemption is effective immediately upon receipt of the application. | Business Opportunity exemption is effective immediately upon receipt of the application. |
| Georgia | Business Opportunity law provides exemption for franchisors that hold a federal or state registered trademark. | N/A |
| Hawaii | Franchisor can sell a franchise on the eighth day after the state receives the FDD. However, we strongly suggest you contact us to confirm your effective date with the state of Hawaii before selling a franchise. | Franchisor can sell a franchise on the eighth day after the state receives the FDD. However, we strongly suggest you contact us to confirm your effective date with the state of Hawaii before selling a franchise. |
| Idaho | No franchise or business opportunity registration is required. | N/A |
| Illinois | The registration will become automatically effective on the 21st day after the filing was received, unless a denial order has been issued. Because the state almost always sends comment letters for initial filings, we strongly recommend you wait until we have given an effective date before you offer or sell franchises in Illinois. | Renewals are automatically effective two business days after receipt of the application. However, the application is subject to examiner review and a stop order may be issued at any time. Reviews are usually completed within 30 days (but may come as late as 9 months later). |
| Indiana | Registration is effective upon receipt of the application. | Registration is effective upon receipt of the application. |
| Iowa | No franchise or business opportunity registration is required. | N/A |
| Kansas | No franchise or business opportunity registration is required. | N/A |
| Kentucky | Business Opportunity exemption is effective immediately upon receipt of the application. | N/A |
| Louisiana | Business Opportunity law provides exemption for franchisors that hold a federal or state registered trademark. | N/A |
| Maine | Business Opportunity law provides exemption for franchisors that hold a federal or state registered trademark. | N/A |
| Maryland | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. |
| Massachusetts | No franchise or business opportunity registration is required. | N/A |
| Michigan | Technically, a registration in effective upon receipt. However, we suggest you wait until we have received the date-stamped notice from the state before offering or selling franchises. | Technically, a registration in effective upon receipt. However, we suggest you wait until we have received the date-stamped notice from the state before offering or selling franchises. |
| Minnesota | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. |
| Mississippi | No franchise or business opportunity registration is required. | N/A |
| Missouri | No franchise or business opportunity registration is required. | N/A |
| Montana | No franchise or business opportunity registration is required. | N/A |
| Nebraska | Registration is effective immediately upon receipt of the application. | N/A |
| Nevada | No franchise or business opportunity registration is required. | N/A |
| New Hampshire | No franchise or business opportunity registration is required. | N/A |
| New Jersey | No franchise or business opportunity registration is required. | N/A |
| New Mexico | No franchise or business opportunity registration is required. | N/A |
| New York | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. |
| North Carolina | Business Opportunity law provides exemption for franchisors that hold a federal registered trademark. | N/A |
| North Dakota | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. |
| Ohio | No franchise or business opportunity registration is required. | N/A |
| Oklahoma | No franchise registration is required. Business opportunity law provides exemption for franchisors that are in compliance with FTC Rule. | N/A |
| Oregon | No franchise or business opportunity registration is required. | N/A |
| Pennsylvania | No franchise or business opportunity registration is required. | N/A |
| Puerto Rico | No franchise or business opportunity registration is required. | N/A |
| Rhode Island | If no stop order is in effect, a franchise registration application is effective on the 30th business day after filing the application. If additional information is required, the application becomes effective on the 15th business day after the additional information is filed. Rhode Island will typically send a permit much earlier than 30 days. | If no stop order is in effect, a franchise registration application is effective on the 30th business day after filing the application. If additional information is required, the application becomes effective on the 15thbusiness day after the additional information is filed. Rhode Island will typically send a permit much earlier than 30 days. |
| South Carolina | Business Opportunity law provides exemption for franchisors that hold a federal or state registered trademark. | N/A |
| South Dakota | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. |
| Tennessee | No franchise or business opportunity registration is required. | N/A |
| Texas | Filing is effective immediately upon receipt of the application. | N/A |
| U.S. Virgin Islands | No franchise or business opportunity registration is required. | N/A |
| Utah | Business Opportunity exemption is effective immediately upon receipt of the application. | Business Opportunity exemption is effective immediately upon receipt of the application. |
| Vermont | No franchise or business opportunity registration is required. | N/A |
| Virginia | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. |
| Washington | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. |
| West Virginia | No franchise or business opportunity registration is required. | N/A |
| Wisconsin | Registration is effective upon receipt of the application. | Registration is effective upon receipt of the application. |
| Wyoming | No franchise or business opportunity registration is required. | N/A |
Here is a chart showing the registration or filing state’s expiration timelines:
| State | Initial Filing Requirements | Offers and Sales During Renewal Periods |
| Alabama | No franchise or business opportunity registration is required. | N/A |
| Alaska | No franchise or business opportunity registration is required. | N/A |
| Arizona | No franchise or business opportunity registration is required. | N/A |
| Arkansas | No franchise or business opportunity registration is required. | N/A |
| California | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. | A franchisor may offer (BUT NOT SELL) a franchise while an application for renewal or amendment is pending if the prospective franchisee receives the following: The FDD as filed.Written statement from the franchisor that:• The filing has been made, but is not effective;• The information in the FDD and exhibits has not been reviewed by the commissioner; and• The franchisor will deliver to the prospective franchisee an effective FDD and exhibits at least 14 days prior to execution by the prospective franchisee of a binding agreement or payment, showing all changes from the FDD originally received by the prospective franchisee.The effective FDD showing all changes from the FDD originally received by the prospective franchisee. |
| Colorado | No franchise or business opportunity registration is required. | N/A |
| Connecticut | If the federal trademark registration is owned by a third party, the trademark registration and license agreement must be filed. Franchisors with a federal registered trademark are exempt from registration. Franchisors without a federal registered trademark must register as a business opportunity. | N/A |
| Delaware | No franchise or business opportunity registration is required. | N/A |
| District of Columbia | No franchise or business opportunity registration is required. | N/A |
| Florida | Business Opportunity exemption is effective immediately upon receipt of the application. | Business Opportunity exemption is effective immediately upon receipt of the application. |
| Georgia | Business Opportunity law provides exemption for franchisors that hold a federal or state registered trademark. | N/A |
| Hawaii | Franchisor can sell a franchise on the eighth day after the state receives the FDD. However, we strongly suggest you contact us to confirm your effective date with the state of Hawaii before selling a franchise. | Franchisor can sell a franchise on the eighth day after the state receives the FDD. However, we strongly suggest you contact us to confirm your effective date with the state of Hawaii before selling a franchise. |
| Idaho | No franchise or business opportunity registration is required. | N/A |
| Illinois | The registration will become automatically effective on the 21st day after the filing was received, unless a denial order has been issued. Because the state almost always sends comment letters for initial filings, we strongly recommend you wait until we have given an effective date before you offer or sell franchises in Illinois. | Renewals are automatically effective two business days after receipt of the application. However, the application is subject to examiner review and a stop order may be issued at any time. Reviews are usually completed within 30 days (but may come as late as 9 months later). |
| Indiana | Registration is effective upon receipt of the application. | Registration is effective upon receipt of the application. |
| Iowa | No franchise or business opportunity registration is required. | N/A |
| Kansas | No franchise or business opportunity registration is required. | N/A |
| Kentucky | Business Opportunity exemption is effective immediately upon receipt of the application. | N/A |
| Louisiana | Business Opportunity law provides exemption for franchisors that hold a federal or state registered trademark. | N/A |
| Maine | Business Opportunity law provides exemption for franchisors that hold a federal or state registered trademark./td> | N/A |
| Maryland | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. |
| Massachusetts | No franchise or business opportunity registration is required. | N/A |
| Michigan | Technically, a registration in effective upon receipt. However, we suggest you wait until we have received the date-stamped notice from the state before offering or selling franchises. | Technically, a registration in effective upon receipt. However, we suggest you wait until we have received the date-stamped notice from the state before offering or selling franchises. |
| Minnesota | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. |
| Mississippi | No franchise or business opportunity registration is required. | N/A |
| Missouri | No franchise or business opportunity registration is required. | N/A |
| Montana | No franchise or business opportunity registration is required. | N/A |
| Nebraska | Registration is effective immediately upon receipt of the application. | N/A |
| Nevada | No franchise or business opportunity registration is required. | N/A |
| New Hampshire | No franchise or business opportunity registration is required. | N/A |
| New Jersey | No franchise or business opportunity registration is required. | N/A |
| New Mexico | No franchise or business opportunity registration is required. | N/A |
| New York | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. |
| North Carolina | Business Opportunity law provides exemption for franchisors that hold a federal registered trademark. | N/A |
| North Dakota | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. |
| Ohio | No franchise or business opportunity registration is required. | N/A |
| Oklahoma | No franchise registration is required. Business opportunity law provides exemption for franchisors that are in compliance with FTC Rule. | N/A |
| Oregon | No franchise or business opportunity registration is required. | N/A |
| Pennsylvania | No franchise or business opportunity registration is required. | N/A |
| Puerto Rico | No franchise or business opportunity registration is required. | N/A |
|
Rhode Island |
If no stop order is in effect, a franchise registration application is effective on the 30th business day after filing the application. If additional information is required, the application becomes effective on the 15th business day after the additional information is filed. Rhode Island will typically send a permit much earlier than 30 days. |
If no stop order is in effect, a franchise registration application is effective on the 30th business day after filing the application. If additional information is required, the application becomes effective on the 15thbusiness day after the additional information is filed. Rhode Island will typically send a permit much earlier than 30 days. |
| South Carolina | Business Opportunity law provides exemption for franchisors that hold a federal or state registered trademark. | N/A |
| South Dakota | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. |
| Tennessee | No franchise or business opportunity registration is required. | N/A |
| Texas | Filing is effective immediately upon receipt of the application. | N/A |
| U.S. Virgin Islands | No franchise or business opportunity registration is required. | N/A |
| Utah | Business Opportunity exemption is effective immediately upon receipt of the application. | Business Opportunity exemption is effective immediately upon receipt of the application. |
| Vermont | No franchise or business opportunity registration is required. | N/A |
| Virginia | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. |
| Washington | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. | A franchisor cannot offer or sell franchises until it receives a permit letter from the state. |
| West Virginia | No franchise or business opportunity registration is required. | N/A |
| Wisconsin | Registration is effective upon receipt of the application. | Registration is effective upon receipt of the application. |
| Wyoming | No franchise or business opportunity registration is required. | N/A |