Franchise laws cannot be waived and therefore offering and selling a relationship that is a ‘franchise’ without complying with applicable regulatory rules can be a risky and costly choice, as discussed below. California was the first state to regulate the business method when in 1970 it enacted the Franchise Investment Law. The Franchise Investment Law required pre-sale disclosure of certain information and pre-sale registration of the offering. Like California’s Franchise Investment Law, other state disclosure laws and Federal law require pre-sale disclosure various information, unless the relationship is exempt or excluded. State and federal laws, although not entirely consistent, share common definitional elements.

Source: Forbes June 04, 2018 03:56 UTC