Massachusetts Franchise Registration
Massachusetts is considered one of the best states to operate a franchise, mainly because of the low corporate and personal tax rates. The state has a low fuel cost which is a critical factor for businesses to reduce the overall cost of operation. On the other hand, the individual income tax rate translates to more sales for companies since residents have more liquid income, which is among the many tax advantages it offers. An educated workforce is a significant benefit in Massachusetts, with leading publications rating its workforce as the most educated in the United States. Aside from having one of the most substantial public education, it has an active convention industry.
Massachusetts is a non-registration state, which means that a franchise is not required to register or file any documentation with the state if you intend to offer or sell a franchise. Although a franchise is not required to register with the state, it is vital to ensure you comply with federal franchise laws before selling or offering a franchise in the state.
As an industry, franchising is regulated and ensures that the obligation between franchisors and franchisees about the disclosure of the Franchise Disclosure Document (FDD) adheres. The aim of disclosing the FDD is to provide all the relevant information a prospective franchisee requires regarding the recurring obligations and fees, potential franchise investment, the range of any protected territory, and other vital disclosures.
The Federal Trade Commission requires franchisors to disclose the Franchise Disclosure Documents within 14 days to the buyer before the actual date of the sale. Every state is different in franchise law; whether pro-registration or not, it is advisable to consult a professional franchise lawyer before establishing your business. The purpose of onboarding a franchise lawyer is to help you navigate the highly regulated industry without breaking state and federal laws.
Since Massachusetts is a non-registration state, regulation is done at the federal level rather than the state level. At this level, franchising is regulated by the Federal Franchise law, while the Federal Trade Commission enforces and implements the franchise rules. In addition, franchisors must manage and maintain their Federal Disclosure Document, franchise relationships, and franchise disclosures to comply with a wide range of state franchise relationship laws and state franchise regulations.
At the state level, different filing, registration, disclosure, and related laws are imposed on franchisors and vary from one state to another. Since Massachusetts is among the non-registration states, it does not impose stringent rules and regulations like annual FDD registration and annual or one-time filing.
Suppose you are a prospective purchaser of a franchise. In that case, the Franchise law provides you with pertinent information to help gauge the benefits and risks of investing in a franchise. The law requires all franchisors to provide potential franchisees with a detailed disclosure document containing at least 23 specific items on the offered franchise, its offices, and other franchisees.
For more information on how to register your franchise in Massachusetts, visit the Franchise Marketing Systems site: https://www.fmsfranchise.com/learn/resources/state-guidelines/
