Mississippi Franchise Registration
Mississippi is considered among the top states to do business in the United States, with increased revenues and economic gains from various industries being casino gambling and tourism. These industries have been instrumental in attracting businesses and start-up companies in the state, especially with significant resort towns like Bay St. Louise, Biloxi, and Gulfport. In addition, Mississippi is a good destination for business because the state has a diverse industry base due to its transportation and marketing advantages like tax exemption programs, lack of income tax for all registered corporations, limited liability, and flexible profit distributions, especially for LLCs.
Mississippi is among the states that have not enacted franchise registration laws. Therefore, a franchisor is not required to adhere to any franchise or business opportunity laws to sell or offer a franchise. However, since the state has not enacted any laws regarding franchise registration, the state mandates that a franchisor adheres to Federal Trade Commission laws. This means that all franchisors venturing in the state must have updated Franchise Disclosure Documents (FDD), which should be presented to the prospect franchisee 14 days before the set selling date of a franchise location.
Like all other states, both registration and non-registration states in the country, it is advisable to ensure that you get right, especially if it’s your first time. Before offering, selling, or marketing your business, you should familiarize yourself with the state and federal laws that are in place. Onboarding a franchise lawyer is recommended since they have pertinent knowledge regarding franchising in different states and the requirements by state and federal authorities.
Federal Trade Commission Amended Franchise Rule dictates the regulations for franchises in Mississippi, which among other things, requires franchisors to disclose a valid and updated Franchise Disclosure Document (FDD) before accepting payment from a franchisee or entering into a franchise agreement. Although the state does not enact any franchise laws, it regulates the franchise relationship through several statutes known as “Mississippi Franchise Statutes” (MFS).
According to the Mississippi Franchise Statutes section 75.24.53, a franchisor can terminate any agreement with the franchisee regarding any offering or sale of a franchise without the need to notify the franchisee of the termination. This should be done at least 90 days before the cancellation date and should be done in writing.
However, the Mississippi Franchise Statutes exempts from the 90-day notice any termination, non-renewal, or cancellation based on bankruptcy, fraud, abandonment, or insolvency of the franchise and the disclosure of insufficient funds check. According to the MFS, it states that a franchisor who withholds relevant information resulting in damages incurred by the franchisee during cancellation notice risks having legal proceedings taken against them.
The statutes also stipulate that any injuries sustained due to franchisor negligence should be awarded recovery of damages, including the cost of the lawsuit, loss of goodwill, and any equitable resource the court deems appropriate.
For more information on how to register your franchise in Mississippi, visit the Franchise Marketing Systems site: www.FMSFranchise.com/about-franchising/guidelines/stateregulations