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U.S. Franchise Registration

Written by: Kevin J. Collette

Reputation Level 6

Business Franchises

Posted over 2 years ago. 1 helpful vote, 0 comments

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Steps to prepare documentation

Preparation of a franchise disclosure document and the logistical support needed to franchise is extensive and expensive. Franchising is not a "get rich" scheme but a method to obtain financing and management on a quick basis from the franchisee (as opposed to development from within the system) and for the franchisee to be able to have access to the name and a "proven" system. Franchising is not for the faint of heart. Initial consultation as to structure, preparation and review of a questionnaire of items. Draft franchise agreement and single unit disclosure document. This process is long and should only be undertaken by one committed to fully support a franchise system and who has the requisite finances to support the franchise system recognizing that the system will not be profitable, in most cases, for years to come.

Filing the state applications

Filing in a registration state, i.e. California, Washington, or Hawaii, includes advertising filing, salesperson filing, state addenda, audited financials, application forms, accounting for amounts needed for the franchisor to provide pre-opening support, lists of fees and required goods, and a proforma of all amounts needed to open the franchise and operate it for 3 months. There are timelines for filings and many states take months to respond so one needs to begin early.