As a franchise owner looking at offering a franchise, a franchise disclosure document is a mandatory requirement. Although this process is free at the federal level, franchise registration states require franchisors to register their FDD with the franchise regulator.
Asides from the uniform registration requirements, each state on the franchise registration map has additional requirements for registering your FDD. Generally, it takes 20 days to 3 months to complete FDD registration, depending on the accuracy of the documents and the time of the year it’s submitted.
Franchise Disclosure Document Registration States
The franchise registration states fall under two distinct categories.
- Franchises with federally registered trademarks must register their FDD in California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, Virginia, Washington, and Wisconsin.
- Franchises without federally registered trademarks must register their FDD in Connecticut, North Carolina, South Carolina, and Maine.
Steps to Register a Franchise Disclosure Document (FDD)
Registering your FDD is an integral part of the franchise sale process. Hence, you must understand the steps to avoid compliance issues.
Step 1: Identify the states involved in the Franchise sale. These may include the operating state, state of residence, where sales occurred, and where the franchise will be established.
Step 2: Determine the registration process and filing status for each state involved in 1 above.
Step 3: Register your FDD with the state. File out a uniform registration application with the designated state franchise regulator.
Note: The FDD registration process and fees depend on the state. However, The North American Securities Administrators Association (NASAA) publishes uniform processes, standardized franchise registration, forms, and instructions.
