Arkansas Franchise Registration
Arkansas has a practical and accessible government which makes it possible for businesses to grow and exceed their expectations. With the third-lowest cost of conducting business operations, most companies find it easy to thrive in Arkansas. The state offers businesses a wide range of competitive incentives like community grants to cash rebates which are critical factors in investment and job creation. In addition, Arkansas has a business-friendly tax system that provides businesses with credits and exemptions. For all who plan on franchising their business in Arkansas, you are guaranteed to make money quickly and efficiently.
Arkansas is among the non-registration states, which means you are not required to register your Franchise Disclosure Document with the state’s regulator. Therefore, as a franchisor in Arkansas, you have the liberty of offering or selling a franchise without the state’s consent. Although the state has not enacted franchise laws, franchisors must have an updated Franchise Disclosure Document as stipulated by the Federal Franchise Laws before selling or offering a franchise in Arkansas.
Unlike other non-registration states, Arkansas regulates the relationship between Franchisors and franchisees through the Arkansas Franchise Practice Act. The Arkansas Franchise Practice Act comprises franchise relationship laws that govern specific aspects of the franchisor-franchisee relationship. The specific areas which the law governs include cancellation, termination, and renewal of franchise relationships.
According to Arkansas Franchise Practice Act, a franchise is defined as any definite or indefinite agreement, written or oral. The agreement issues another person the license to use a trademark, tradename, service mark, or any related characteristic within a particular territory. The permit can also allow the other person to distribute or sell goods or services within a nonexclusive or exclusive location. This can either be retail or wholesale as stipulated by the agreement.
Arkansas’ definition of a franchise is broad and encompasses a trademark and the granting of a location. However, the Arkansas Franchise Practice Act exempts traditional retail businesses that do not have a degree of control over merchandising activities. In addition, the state’s franchise relationship act aims at protecting franchisees and affording them certainly when it comes to franchisor-franchisee relationships.
Arkansas Franchise Practice Act focuses on specific areas such as non-renewal, termination, or cancellation of a franchise. It mandates that franchisors must have a good reason before carrying out such acts and should provide the franchisees with a 90-day advance written notice. In addition, the notice must have a compelling reason for the cancellation of the franchise agreement. The franchise law also requires franchisees to issue a written notice if they intend to assign or transfer the franchise agreement.
The Arkansas Franchise Practice Act has several other protections for franchisees by creating private rights of action and remedies for material omissions or misleading information in the Franchise Disclosure Document during the sales process.
For more information on how to register your franchise in Arkansas, visit the Franchise Marketing Systems site: https://www.fmsfranchise.com/learn/resources/state-guidelines/
