NASAA Approves 2008 Franchise Registration and Disclosure Guidelines

This posting was written by Peter Reap, Editor of CCH Business Franchise Guide.

The North American Securities Administrators Association (NASAA) on June 6, 2008, adopted its 2008 Franchise Registration and Disclosure Guidelines, as a replacement for NASAA's Uniform Franchise Offering Circular Guidelines and 2007 Interim Franchise Guidelines.

Compliance with FTC Franchise Rule

NASAA's 2008 Franchise Registration and Disclosure Guidelines require that, as of July 1, 2008, all franchisors prepare and distribute disclosure documents that, at a minimum, comply with the disclosure format of the FTC franchise rule, as amended in 2007. The 2008 Guidelines allow states that register franchise offerings to accept, as of July 1, 2008, franchise disclosure documents prepared under the FTC's amended Franchise Rule with certain additional requirements, including a "state risk factor" cover page.

The 2008 Guidelines contain the same basic disclosure requirements set out in the Interim Guidelines and add a provision for electronic disclosure. In addition, they feature new filing instructions and uniform registration forms that were not included as part of the Interim Guidelines. Instructions for preparation immediately follow each form.

Forms

Specifically, the forms included are: (1) Uniform Franchise Registration Application; (2) Franchisor's Costs and Sources of Funds; (3) Uniform Franchise Consent to Service of Process; (4) Franchise Seller Disclosure Form; (5) Franchise Disclosure Document; (6) Application Fee; (7) Guarantee of Performance; (8) Consent of Accountant; and (9) Advertising and Promotional Materials.

The 2008 Guidelines appear at CCH Business Franchise Guide ¶5705 and here at the NASAA web site.