There is no federal filing but one must prepare a Franchise Disclosure Document to meet the requirements of the FTC. Several states also require registration as a franchise and/or as a business opportunity. There are 3 basic elements of a franchise (use of mark, for a fee, with a system).
1
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.
2
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.
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