Wednesday, April 18, 2012

NASAA Issues Revised Proposal for Model Franchise Exemptions

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

The Franchise and Business Opportunity Project Group of the North American Securities Administrators Association (NASAA) re-released for comment yesterday proposed changes to NASAA’s Model Franchise Exemptions. The proposal includes model language for states to use to promulgate exemptions from registration and disclosure provisions under current state laws.

In response to a previous solicitation for comment, NASAA received a total of six public comments regarding various provisions in the Model Exemptions.

After considering the comments, the Franchise Project Group concluded that, in general, the Model Exemptions strike the right balance between the desirability of reducing compliance burdens on franchisors and the need for prospective franchisees to review Franchise Disclosure Documents in appropriate cases in order to make informed investment decisions. The Franchise Project Group decided—in light of several comments—to propose revisions to specific Model Exemptions.

Revised Exemptions include the Fractional Franchise Exemption, the Experienced Franchisor Exemption, the Sophisticated Purchaser Exemption, and the Discretionary Exemption.

A new release, including a link to download the Revised Proposed Model Franchise Exemptions, appears here.

Comments will be accepted through May 16, 2012. They should be sent by email or in writing to:

Dale Cantone
Chair, Franchise and Business Opportunity Project Group
Office of the Maryland Attorney General
Division of Securities
200 St. Paul Place
20th Floor Baltimore, MD 21202-2020


Joseph Opron
750 First Street, NE
Suite 1140
Washington, DC 20002


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