You want to acquire a franchise brand in your state, but uncertain about the rules for franchise registration and the filing fees. This article will detail the type of fees you need to pay and the process that is governed by each state.
There are three types of franchise registration states:
- Non-Registration States: these are states where you just need a Franchise Disclosure Document (FDD)
- Filing States: these are the states that need to pay for a filing fee and will not need additional approval
- Franchise Registration States: these are the states that require a filing fee and approval by the state
Non-Registration States
The following states do not require franchise registration or filing fees. The state regulates that the franchisor follows the FDD guidelines and have an approved FDD. So it is quite easy to register a franchise in these states.
Alabama
Alaska
Arizona
Arkansas
Colorado
Delaware
District of Columbia
Georgia
Idaho
Iowa
Kansas
Louisiana
Massachusetts
Mississippi
Missouri
Montana
Nevada
New Hampshire
New Jersey
New Mexico
Ohio
Oklahoma
Oregon
Pennsylvania
Tennessee
Vermont
West Virginia
Wyoming
To Register a Franchise: Filing States
To register a franchise in a particular state, part of the registration process requires the franchisor to file and pay a fee but does not require the franchisor to submit documents and seek approval to sell franchises.
Connecticut has a franchise registration filing fee of $400.
Florida has a franchise registration filing fee of $100.
Kentucky has a franchise registration filing fee of $0.
Maine has a filing fee of $25.
Nebraska has a filing fee of $100.
North Carolina has a filing fee of $250.
South Carolina has a filing fee of $100.
Texas has a filing fee of $25.
Utah has a filing fee of $100.
States that Require Registration and Fees
To register a franchise, these are the states that require franchise registration and approval of FDD prior to selling in or from the state. These fees can and may change depending on the state regulators.
CALIFORNIA – Franchisee Pays Fee of $675
HAWAII – Franchisee Pays Fee of $125
ILLINOIS – Franchisee Pays Fee of $500
INDIANA – Franchisee Pays Fee $500
MARYLAND – Fee $500
MICHIGAN – Fee $250
MINNESOTA – Fee $400
NORTH DAKOTA – Fee $250
NEW YORK – Fee $750
RHODE ISLAND – Registration Fee $500
SOUTH DAKOTA – Registration Fee $250
VIRGINIA – Registration Fee $500
WASHINGTON – Registration Fee $600
WISCONSIN – Registration Fee $400
Keep in mind, other than registration fees, another set of fees that prospective franchisees need to pay is royalty fee and initial franchise fee to the franchisor after they sign the franchise agreement. Often times, there are ongoing fees that one needs to pay as they continue to own the franchise.
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Sources: Accurate Franchising
