Georgia

Registration or Filing Required? No*
Business Opportunity Laws? Yes

Georgia is not a franchise registration state nor a franchise filing state. However, Georgia does have business opportunity laws that sellers of business opportunities must adhere to. However, most franchisors are exempt from complying with those laws if their franchise is the owner or licensee of a registered trademark, either in Georgia or at the federal level. More information can be found at the Georgia Consumer Protection Division’s Website.

Is My Franchise Exempt, and if so, do I need to File Anything?

The Georgia Multilevel Distribution and Sale of Businesses Opportunity Statute defines a business opportunity as the sale or lease of any products, equipment, supplies or services for the purpose of enabling the buyer to start a business, where the seller represents one of the following:

1. That the seller will provide locations or assist the buyer in finding locations for the use or operation of vending machines, racks, display cases, or other devices;
2. The seller will purchase products made by the buyer using the supplies or services sold to them by the seller; or
3. That the seller will provide a sales or marketing program in conjunction with the agreement (and the buyer has to pay a fee of greater than $500). This does not apply to sales or marketing programs made in conjunction with the license of a registered trademark.

A franchise business would fall under the definition of a “business opportunity” in Georgia, except for the exclusion of sales or marketing programs made in conjunction with the licensing of a registered trademark. So, a franchisor will typically be exempt if it has a trademark registered federally or in the state of Georgia. However, if the franchisor’s business or offer falls under subsections 1 or 2 above, it will still be subject to Georgia’s business opportunity laws. There are several other types of business listed in the state’s statutes that do not qualify as business opportunities, but these would not apply to most franchisors.

If a franchise has a registered trademark, either with the USPTO or the state of Georgia (and does not otherwise qualify as a business opportunity), the franchise does not need to file any notice or letter with the state and can proceed to sell franchises while relying on that exemption.

What Should I Do if My Franchise is Not Exempt?

If you do not have a registered trademark for your franchise you will be subject to provisions of the Business Opportunity Law. The Law puts a significantly greater burden on your franchise, including submitting more stringent disclosure documents, restricting when and how initial franchise fees can be collected, obtaining surety bonds, and maintaining an agent in the state authorized to receive service of process. In this case, we would recommend obtaining a registered trademark either at the federal level or in the state of Georgia. While federal registration can be more difficult and time consuming, registering a trademark in Georgia is relatively simple. It only requires that the trademark be used somewhere in the state of Georgia, that the owner of the trademark submit three examples of the trademark being currently used in commerce, and that the owner pay a $15 registration fee. Our brilliant trademark attorneys would be more than happy to help you register your mark. See our Trademarks page for more information.

How Do I Register?

If your business is not exempt and you do not want to obtain a registered mark, you will need to comply with Georgia’s Business Opportunity Law. The Law requires a business opportunity seller to submit a Consent to Service of Process, along with a cover letter, to the Secretary of State’s office, appointing the Georgia Secretary of State as its agent for service of process for any alleged violation of the state’s business opportunity laws. The filing also requires the seller to pay a nominal fee.

The Law also requires business opportunities, among other things: (i) to have an agent in Georgia authorized to receive service; (ii) to furnish state-required disclosures in the offer or sale of a business opportunity; and (iii) in some instances, to obtain a surety bond in the amount of $75,000. Franchisors also cannot collect the full amount of the purchase price when executing the franchise agreement. Instead, franchisors are allowed to initially collect up to 15% of the purchase price, with the balance being paid into an escrow account established with a bank or attorney. The franchisor can collect the remaining balance 60 days after the start of the franchisee’s business.

Fun Fact: Georgia is home to the largest swamp in North America – the Okefenokee. Take that Louisiana! Also, in a crazy political twist, Georgia has managed to have three governors – simultaneously – twice!