Ohio Franchise Registration

Ohio Franchise Registration

The economy of Ohio has seen its ups and downs, but since the 2008 financial crisis, the state is now one of the top places to do business in the country. Business owners setting up their establishment in the state enjoy a ringing endorsement from the community. With a large friendly community, companies get sufficient support from the locals, which helps you retain your business. The Midwest region is not famous for tech, but Ohio is the exception.  As an up-and-comer in tech, there are many tech companies in Ohio replacing the lost manufacturing economy. In addition, the tax-friendly policies of the state enhance the pro-business environment, making franchising an excellent idea.

The United States of America has grouped its states into two groups in terms of franchising. These include registration and non-registration states. States that have enacted specific franchise laws to govern franchising fall under registration states. This means that the franchisor must register or file with the state before offering or selling a franchise in the state.

On the other, non-registration states lack specific franchise laws, and franchisors do not have to register or file with the state before offering their franchise. Ohio is considered a franchise non-registration state. However, unlike other states in the same category, Ohio has enacted laws that govern business opportunities. Although these laws are aimed at business opportunities established in the state, they also regulate the relationship between franchisor and franchisee. The state’s business opportunity laws provide franchisees certain rights and all involved in purchasing a business opportunity.

Since Ohio does not have specific franchising laws at the state level, the franchisor-franchisee relationship is governed by the Federal Trade Commission Amended Franchise Rule (FTC Rule). This means that all franchisors venturing in the state need to familiarize themselves with the franchise laws at the state level and the business opportunity laws to avoid law infringements on both the federal and state government. It is advisable to consult a franchise attorney to help you navigate the various requirements mandated by law. 

The Federal Trade Commission Amended Rule stipulates that franchisors must issue prospective franchisees an updated Franchise Disclosure Document (FDD). The FDD is provided before committing to any agreement of payment of funds. Therefore, franchisors are mandated to ensure that their FDD contains all the relevant information about the franchise that a prospective franchisee will need to know before committing. Twenty-three items guide franchisors when drafting their franchise disclosure document, but onboarding an expert attorney helps to ensure the draft covers all vital information.

Before engaging a prospective franchisee, the federal franchise laws require that the franchisor issue the prospective franchisee with an FDD at least 14 days before the actual date of the sale. This provides sufficient time to go through the document and decide whether to proceed with the agreement.

For more information on how to register your franchise in Ohio, visit the Franchise Marketing Systems site:  https://www.fmsfranchise.com/learn/resources/state-guidelines/

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