Each state has its own set of franchise registration, disclosure, filing, and relationship laws. As a result, some states have more stringent franchise laws and regulations than others. To understand how these laws can affect franchisors and franchisees in Missouri, this guide will review the specific franchise laws in the state and explain what they can mean for you.
The Franchise Registration Process
Franchisors often face a complex process when registering their franchise. In fact, most states have a regulatory agency that examines the Franchise Disclosure Document (FDD) of businesses offering franchises for sale within the state. Some states even have unique requirements for registering the franchise, including specific disclosures that need to be accurately filed. It is also not uncommon for states to require an annual registration to verify that the franchise meets all the requirements.
However, when it comes to this franchise registration process, there are three types of franchise state registrations. They include:
- The Franchise Filing States: These states mandate franchisors to submit a Franchise Disclosure Document and pay a certain fee without requiring additional approval from the state.
- The Franchise Registration States: These states require franchisors to file a Franchise Disclosure Document, seek approval from the state, and pay a fee.
- The Franchise Non-Registration States: These states require franchisors to comply with federal franchise laws in order to offer and sell their franchise in the state.
Missouri Franchise Laws
Missouri is known as a non-registration state, as there are no enacted laws that require a franchisor to register with the state as a franchise or business opportunity. Nor are there any requirements to provide disclosures to a franchisee beyond what is already required by the Federal Trade Commission Amended Franchise Rule.
However, Missouri does prohibit franchisors from terminating or not renewing a franchise agreement without giving the franchisees a notice period of at least 90 days. Yet, there are exceptions to this rule. For instance, franchisors are not required to provide notice if they are canceling, failing to renew, or terminating an agreement based on fraud, abandonment, criminal misconduct, insolvency of the franchisee, bankruptcy, or insufficient funds.
What Requirements Need To Be Satisfied When Franchising in Missouri
Although there are no specific requirements that individuals need to satisfy in Missouri to franchise a business, it is crucial to ensure that the franchise complies with legal requirements at the federal level. For instance, according to the Federal Trade Commission, franchisors are required to offer prospective franchisees an updated Franchise Disclosure Document. This document discloses details about the franchise that a franchisee would like to know before investing in the business. This document must also be presented at least 14 days before the sale.
Contact FortmanSpann Today for More Information Regarding Franchising in Missouri
At FortmanSpann, our legal team provides individualized services tailored to our clients’ needs. We know that a one-size-fits-all method will not work, and it is our job to listen to your story, assess each aspect of the case, and help you fight for the results you deserve. For these reasons, if you are looking for information about franchising in Missouri, contact FortmanSpann today to speak with our team.