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.
Mohamed founded Metwally CPA PLLC in 2020 in the Dallas-Fort Worth metropolitan area. He holds active CPA license in the state of Texas and California. Mohamed is the firm’s Executive Director. Mohamed has a Master of Science (M.S.) degree in Accounting from University of Dallas. He has extensive assurance experience in a wide variety of industries, and he also devotes considerable time consulting and working with organizations and CPA firms on internal controls, audit quality, automation, and accounting best practices. He has over 15 years of audit experience.
Prior to founding the firm, Mohamed worked for big 4 and national firms for over than 10 years in the assurance practice. Mohamed worked on private clients as well as public clients and specialized in financial services sector.
He is a member of the Texas CPA Practice Issues, Diversity and Inclusion, and Governmental Accounting and Single Audits Conference Committees of Texas Society of CPAs.
Mohamed is a member of the American Institute of Certified Public Accountants, member of the AICPA small business group, member of the American institute of Certified Management Accountants, and Texas Society of Certified Public Accountants.
