North Carolina Franchise Registration

North Carolina Franchise Registration

The state of North Carolina has ranked in the top places to do business in the United States for over a decade. The regulatory environment offers entrepreneurs the opportunity to grow their businesses and thrive. With one of the most favorable taxes for businesses, the cost of starting and operating a business is significantly low. This contributes to North Carolina’s pro-business environment. Since labor availability is a crucial concern for most business owners, the state has one of the most highly educated labor supplies in the country. Regardless of the industry, you are guaranteed a constant supply of labor that is enterprise-ready.

North Carolina is considered a franchise filing state, meaning that franchisors must file their Franchise Disclosure Documents with the state. Before offering or selling a franchise, the state mandates that franchisors file with the North Carolina Secretary of State. The franchisor-franchisee relationship is governed by the enacted franchise laws in the state. This means that franchisors must be fully aware of the franchise laws at the state and federal levels to avoid infringement with the law. 

The North Carolina Department requires franchisors of the Secretary of State to pay a filing fee of $250. Filing falls under the North Carolina Business Opportunity Laws and ensures that your franchise offering is authorized and registered as a business opportunity in the state. Your franchise filing should include a cover letter addressed to the state’s Secretary of State and two copies of an updated Franchise Disclosure Document (FDD).

All franchisors are required to ensure that their franchise offering does not trigger the posting of a bond due to infringement as stipulated by North Carolina’s Business Opportunity Statute G.S. 66-96. Filing should also contain consent to service of process specific to North Carolina instead of a uniform approval. The state mandates that the filing fee is in the form of a check payable to the state. If your filing is accepted, you will receive a North Carolina Business Opportunity filing certificate.

Franchisors must adhere to the state’s Business Opportunity Laws which stipulate that franchisors must annually renew their Franchise Disclosure Document. Aside from complying with the state’s Business Opportunity Laws, they also need to comply with the Federal Trade Commission Amended Rule (FTC Rule). Franchisors who fail to comply with either state or federal laws risk infringement, resulting in costly fines and penalties. 

Consulting a professional franchise attorney helps you avoid such issues as your franchise in North Carolina. A lawyer also enables you to draft a comprehensive Franchise Disclosure Document to incorporate all the vital information before agreeing or making payment. The FDD should be issued to a prospective franchisee 14 days before the sale date as stipulated by the FTC Rule. In addition, franchisors need to know that North Carolina recognizes franchises as business opportunities and, therefore, must comply with the state’s Business Opportunity Laws.

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

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