Maryland Franchise Registration
Located in the Mid-Atlantic region of the United States, Maryland is among the thirteen original states. The state’s service businesses offer employment to a vast majority of the total workforce, compared to other sectors of the economy. Through its Department of State and Economic Development, Maryland has taken an interest in the private sector, making it one of the best places to start a business. The agency encourages firms to relocate to the state to promote tourism and the economy. Maryland, over the years, has become a center for firms specializing in Biotechnology, Information and Technology, aerospace, and many other high-technology industries, making it the leading state in the IT “new-economy” of the century.
Maryland is among the states that have enacted franchise laws and require a franchisor to register before offering or selling a franchise, as stipulated by Maryland Franchise Law. This means you are required to register your Franchise Disclosure Document with the Securities Division of the Maryland Attorney General’s Office. The Division must oversee and enforce the FDD registration and franchise laws. In addition, the state requires all franchisors to pay an initial registration fee of $500 and an annual renewal fee of $250, which lasts for a year before renewal.
The state’s franchise laws stipulate what constitutes a franchise and determine a relationship, including written or verbal agreement. This relation and agreement provisions involve a marketing plan or system, licensing a trademark or trademarks used to identify the brand’s products, and an initial fee’s direct or indirect payment. In favor of finding a franchise relationship, Maryland franchise law broadly interprets FDD registration and disclosure requirements for maximum compliance.
When registering your Franchise Disclosure Documents, one should ensure you have all the documents to successful the process. Some of the documents needed during franchise registration include uniform franchise registration application page, franchisor’s cost and source of funds, franchise seller disclosure form, franchise disclosure document with state cover page, certification page, auditor’s consent letter, and advertisement copies and promotional materials.
For a successful registration process, it’s crucial to ensure that you comply with the state’s Franchise Registration Guidelines, which NASAA publishes. All franchisors looking to register their franchise must adopt the new NASAA Franchise State Cover Sheet, effective January 1, 2020. The Maryland Securities Division Responds to all FDD registration applications, as well as the renewal application. The duration takes for you to receive feedback depends on how complete your FDD and application are.
After submitting your application, the state will assign you a franchise examiner, and a confirmation letter will be sent directly to your mail with your file number. The examiner will review your file number within 30 days of your submission and review your application and FDD before issuing you a letter with all the deficiencies and changes required for registration.
For more information on how to register your franchise in Maryland, visit the Franchise Marketing Systems site: https://www.fmsfranchise.com/learn/resources/state-guidelines/