NASAA’s Franchise and Business Opportunity Project Group is soliciting both internal and public comments on a proposal for model state law provisions regarding the delivery of franchise disclosure documents.
The Proposal follows new federal franchise delivery requirements adopted under an Amended Federal Trade Commission Franchise Rule in 2007. In the interests of uniformity, the Proposal recommends that states revise their existing franchise law provisions, where applicable, to eliminate requirements to provide a franchise disclosure document at the “first personal meeting” with a prospective franchisee. The Proposal also recommends that states revise existing provisions requiring disclosure from “10 business days” to “14 calendar days” before a prospective franchisee signs an agreement or pays any money relating to the franchise relationship.
Consistent with the FTC’s Amended Franchise Rule, the Proposal includes a provision that franchisors must provide a prospect with the disclosure document earlier in the franchise sales process upon reasonable request. The Proposal includes model statutory and regulatory language to effectuate the new uniform state franchise delivery requirements.
The comment period begins on July 29, 2009, and will remain open for 20 days. All comments should be submitted on or before August 18, 2009. To facilitate consideration of comments, please submit copies to each member of the Project Group and the NASAA Legal Department.
Download: Proposed Statement of Policy Regarding Uniform Franchise Delivery Requirements
Franchise and Business Opportunity Project Group
Dale Cantone, Chair
Office of the Attorney General
Division of Securities
200 St. Paul Place, 20th Floor
Baltimore, MD 21202-2020
Office No. (410) 576-6368
Fax No. (410) 576-6532
Department of Financial Institutions
210 11th Street
3rd Floor West, Room 300
Olympia, WA 98504-1200
Office No. (360) 902-8732
Fax No. (360) 586-5068