Key takeaways
- The FTC Franchise Rule applies in every state: the FDD goes to a buyer at least 14 calendar days before they sign or pay.
- 14 states require registration or a notice filing before you offer franchises there, and most renew every year.
- Eight more states regulate franchise sales as business opportunities and expect an exemption or notice filing, from $25 once in Texas to $100 a year in Florida and Utah.
- Advertising the opportunity to residents of a registration state before you are registered can count as an offer.
Federal rule vs state law
Every franchisor in the United States follows the FTC Franchise Rule. It requires a Franchise Disclosure Document with 23 Items, delivered to a prospective franchisee at least 14 calendar days before they sign a binding agreement or pay any money.
On top of the federal rule, some states add their own step before you can sell: a full registration, a notice filing or a business opportunity exemption. Which one applies depends on where the buyer lives and where the franchised business will operate.
The 14 registration states
These states require you to register your FDD, or in Michigan’s case file a notice, before you offer or sell a franchise there. Registration usually means filing the FDD with an application and fee, answering examiner comments, and renewing every year.
| State | Regulator | Guide |
|---|---|---|
| California | Department of Financial Protection and Innovation (DFPI) | California overview |
| Hawaii | Department of Commerce and Consumer Affairs | Hawaii overview |
| Illinois | Office of the Attorney General, Franchise Bureau | Illinois overview |
| Indiana | Secretary of State, Securities Division | Indiana overview |
| Maryland | Office of the Attorney General, Securities Division | Maryland overview |
| Michigan | Department of Attorney General (notice filing) | Michigan overview |
| Minnesota | Department of Commerce | Minnesota overview |
| New York | Office of the Attorney General, Investor Protection Bureau | New York overview |
| North Dakota | Securities Department | North Dakota overview |
| Rhode Island | Department of Business Regulation, Securities Division | Rhode Island overview |
| South Dakota | Division of Insurance, Securities Regulation | South Dakota overview |
| Virginia | State Corporation Commission, Division of Securities and Retail Franchising | Virginia overview |
| Washington | Department of Financial Institutions, Securities Division | Washington overview |
| Wisconsin | Department of Financial Institutions, Division of Securities | Wisconsin overview |
California shows how detailed this gets: registration takes effect on the 30th business day after a complete application, the initial fee is $1,865 and renewal is $1,245 a year. See California franchise registration.
Filing and notice states
These states do not review your FDD, but their business opportunity laws cover franchise sales unless you file to claim an exemption. The filing is usually short. The table shows what each state asks for, checked against the state’s own rule or agency page.
| State | What you file | Fee | Renewal |
|---|---|---|---|
| Texas | Exemption notice, Form 2703, Secretary of State | $25 | One time |
| Florida | Exemption filing, DACS Form 10500 | $100 | Every year |
| Utah | Franchise notice, Division of Consumer Protection | $100 | Every year |
| Nebraska | Notice of Exemption, Department of Banking and Finance | $100 | One time |
| Kentucky | Exemption notice through the Attorney General’s portal | See agency | Report changes within 14 days |
| Connecticut | Exclusion claim if the mark is federally registered | See agency | Only on material change |
| North Carolina | Trademark exemption claimed on Form BO-02 | See agency | See agency |
| South Carolina | Notice to the Secretary of State (registered trademark) | See agency | See agency |
“See agency” means the state’s own pages did not confirm a current fee or renewal rule when this guide was reviewed. Your franchise attorney confirms it before filing.
Planning registrations around growth
Start with where your best customers and candidates are, then sequence the filings. A non-registration state can be ready as soon as the FDD is final. A registration state needs the review time built into your launch plan.
Watch the metros that cross state lines. Washington, D.C., Chicago, Philadelphia and Portland all draw customers and candidates from more than one state, so your territory map and your advertising have to respect the rules in each of them.
Coordinate digital advertising with your filings. A franchise sales ad shown to residents of a registration state before you are registered there can count as an offer, so geo-target recruitment campaigns to the states where you can legally sell.
Sources
- FTC Franchise Rule, 16 CFR Part 436
- California Corporations Code §31110 to §31121
- Texas Secretary of State: Business Opportunity FAQs
- Florida Administrative Code, Rule 5J-10.002
- Utah Division of Consumer Protection: Business Opportunity Disclosure Act handbook
- Nebraska Department of Banking and Finance: Business Opportunities and Franchises
- Kentucky Administrative Regulations, 40 KAR 12:410
- Connecticut Department of Banking: Business opportunity regulation
- North Carolina Secretary of State: Business Opportunity Sales
General information, not legal advice. Laws and platform policies change; confirm current requirements with qualified counsel.
