Louisiana State Registration
Over the past five years, the state of Louisiana has attracted over 175 significant economic development projects, leading to over 35,000 new jobs and more than $41 billion in new capital investment. This is one of the reasons why Louisiana ranks among the best places to do business not only in the United States but the World. In addition, the state has maintained a steady infrastructure investment vital for economic growth, foreign trade zone activity, low industrial electric rates, and cybersecurity growth potential. These are some reasons why businesses are relocating to Louisiana and thriving in all aspects of their operations.
Louisiana is not a franchise registration state, but it has enacted business opportunity laws that apply to franchisors who lack a Federal Registered Trademark. The state requires you to have issued your Federal Disclosure Document in compliance with the Federal Franchise Law and a Federal Registered Trademark; you do not have to file or register your FDD with a Louisiana regulator or state agency. However, franchisors are required to register their primary trademark with USPTO. Failure to do so will prompt compliance with Louisiana’s Business Opportunity Laws, including your consent to jurisdiction in the state.
The Louisiana Business Opportunity Law clearly defines a “business opportunity” as the sale or lease of any business exceeding three hundred dollars of any goods or services which are transferred to a buyer with the intent of starting a business. You can be exempted from the Louisiana Business Opportunity Provisions if the transaction involves: the sale or lease of a marketing program or plan made according to the licensing of a service mark or registered trademark. This means that a franchisor with a registered trademark is automatically exempted from the state’s Business Opportunity Laws, as long as there’s compliance with the Federal Franchise Laws. A franchisor who does not have a registered trademark is therefore required to comply with Louisiana’s Business Opportunity Laws. The nature of your franchise system determines your compliance and will require a Business Opportunity Consent to Service of Process or filing with the Louisiana Secretary of State. In addition, the Consumer Protection Section of Louisiana’s Department of Justice enforces Louisiana the state’s business opportunity laws. According to these laws, you must post a bond if your franchise involves: assisting the buyer find business premises that are not owned or leased by the seller. This means that the locations should not be affiliated with the seller or used for previous operations.
You are also required to post a bond if your franchise ensures that the franchisees will get a particular amount of income or it involves a representation by your business or an affiliate indicating that you purchase all products sold, produced, fabricated, assembled, bred, grown, or modified by the franchisee. Again, familiarizing yourself with all the state and federal franchise laws protects you from penalties and consequences.
