Nevada Franchise Registration

Nevada Franchise Registration

The state of Nevada has a conducive business climate, which allows businesses to thrive. There are many reasons why Nevada is a famous state for business. These reasons include low regulatory licensing and annual fees, taxes and tax structures, and competitive utility rates for commercial operations. In addition, Nevada has a rich transportation infrastructure, and proximity to California businesses and markets significantly reduces the cost of storage and shipping, which is an advantage for companies. Before franchising in Nevada or conducting any form of business, it is essential to know the cost of living. Nevada has one of the lowest costs of living, which attracts people from all over the country.

Nevada is among the non-registration states, meaning that it does not have specific franchise laws. Franchisors are therefore not required by the state to register or file their franchise. Although the state has not enacted any franchise laws, Federal Franchise Rule applies to franchisors intending to offer or sell a franchise in Nevada. The Federal Franchise Rule stipulates that all franchisors must disclose their Franchise Disclosure Document before selling or offering a franchise to prospective franchisees.

The FDD should be presented 14 days before committing to any agreement or receiving payment from a franchisee. Ensuring that your Franchise Disclosure Document is updated and is disclosed or issued via proper channels is vital. Consulting a professional franchise lawyer is essential before selling or offering your franchise in Nevada. The franchise attorney ensures that the Franchise Disclosure Document is well-drafted and contains the recommended 23 disclosure sections, also known as items. 

The Federal Franchise Rule stipulates that your Franchise Disclosure Document must include pertinent information about the franchise, like financial statements, regardless of whether the franchise is new or that you are new to franchising. In addition, the Federal Trade Commission Amended Franchise Rule under section 16 C.F.R. 436.1 of the F.T.C. Rule stipulates that franchisors should provide prospective franchisees with only what is included in the Franchise Disclosure Document.

If you intended to franchise in Nevada, no state franchise laws require you to notify the state before selling or offering a franchise. However, franchisors are required to comply with the Federal Trade Commission Amended Franchise Rule. This rule mandates that franchisors must issue prospective franchisors with a valid Franchise Disclosure Document before accepting any form of payment or entering into an agreement.

Consulting a professional franchise attorney is recommended because they help you draft your Franchise Disclosure Document that contains all the items according to the franchise rule. Some of the information contained in the FDD includes fees charged, the legal relationship between you, the franchisee, and other information about the franchise offering.  The disclosure must happen 14 days before payment or signing of the agreement. Depending on the state you intend to franchise your business, it is essential to ensure that you have complied with franchise laws at the state and federal levels.

For more information on how to register your franchise in Nevada, visit the Franchise Marketing Systems site:  www.FMSFranchise.com/about-franchising/guidelines/stateregulations

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