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Franchise Regulation Agencies

A number of states have laws that affect businesses that issue franchise licenses. These franchise regulating agencies are often dealt through a state's attorney general and its securities department.

Owners of franchised businesses with complaints of franchisor fraud can reach out to state regulation agencies. In rare cases, franchisors are barred by regulators from selling franchises in that state. Registering to have the ability to grant franchise licenses in a state is fairly easy. State fees are a few hundred dollars (disclosed below). In the past, attorney’s fees for preparing disclosure documents could be in the tens of thousands or even hundreds of thousands of dollars. But as of last year, there is Legal Zoom, a software application that prepares these documents. Franchise attorneys warn that franchisor wannabees that use such software templates are asking for trouble down the road.

Some states require registration of franchisors that plan to sell franchises in their state. Nowadays, the states below follow a federal franchise disclosure document template that asks certain questions about a franchise concept. These files are registered but they are not monitored by the states for accuracy. The information in the disclosure document is based on what the franchisor says it is.

Buyer beware.

As of last year, business licensors are required federally to complete similar disclosure documents as the franchise disclosure document, albeit a simplified version. So licensing now provides similar transparency as franchising. Licensing business opportunities provides less control of a licensed business than a franchised business.

Franchise Division Department of Corporations
1515 K Street, Suite 200
Sacramento, CA 95814
Registration Fee California $ 675

Commissioner of Securities
Department of Commerce and Consumer Affairs
Business Registration Division Securities Compliance Branch
335 Merchant Street, Room 203
Honolulu, HA 96813
Registration Fee Hawaii  $125

Franchise Division
Office of Attorney General
500 South Second Street
Springfield, IL 62706
(217) 782-1090
Registration Fee Illinois $ 500

Franchise Division
Office of Secretary of State
302 W. Washington St., Rm. E111
Indianapolis, IN 46204
Registration Fee Indiana $ 500

Office of the Attorney General
Division of Securities
200 St Paul Place Baltimore
(888) 743-0023
Registration Fee Maryland $ 500

Consumer Protection Division Franchise Section
PO Box 30213
Lansing MI 48909
(517) 373-1110
Registration Fee Michigan $ 250

Minnesota Department of Commerce
85 7th Place East, Suite 500
St. Paul, MN 55101-2198
Registration Fee Minnesota $400

Franchise & Securities Division
State Department of Law
120 Broadway 23rd Floor
New York NY 10271
(212) 416-8211
Registration Fee New York $ 750

Franchise Division Office of Securities Commission
600 East Boulevard - 5th Floor
Bismarck, ND 58505
Registration Fee North Dakota $ 250

Corporate Securities Section
Dept. of Insurance & Finance
Labor & Industries Bldg.
Salem, OR 97310
(503) 378-4387

Franchise Office Division of Securities
233 Richmond St., Suite 232
Providence, RI 02903
(401) 222-3048
Registration Fee Rhode Island $ 500

Department of Revenue and Regulation Division of Securities
445 East Capitol Ave.
Pierre, SD 57501
(605) 773-4013
Registration Fee South Dakota $ 250

State Corporation Division of Securities
1300 E. Main St. 1st Floor
Richmond, VA 23219
(804) 371-9276
Registration Fee Virginia $ 500

The Department of Financial Institutions
Securities Division
P.O. Box 9033
Olympia, WA 98507-9033
Voice: (360) 902-8760
Registration Fee Washington $ 600

Securities Commission

P.O. Box 1768
Madison, WI 53701
(608) 266-3364
Registration Fee Wisconsin $ 400

Federal Trade Commission (Require sellers fill out their template of a Franchise Disclosure Document)
600 Pennsylvania Ave. NW
Washington, DC 20580
(202) 326-2222

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Don Sniegowski is editor of Blue MauMau, the daily news journal for franchise & small business owners. Call him at +1 (270) 321-1268, tweet @bluemaumau or email