To continue franchising (meaning, selling franchises) after the first year, you must file renewal applications in several registration states, usually within 120 days of your company’s fiscal year end. The renewal applications require you to update and file your Franchise Disclosure Document. The timeframe between filing a renewal application and the state granting the renewal ranges anywhere from a few days to a few months, depending on the state and the specific circumstances. Sometimes, a state may reject a renewal application for one or more reasons; the Larkin Hoffman Franchise Team will respond to those states to ensure that the renewal application is accepted. In all other states, you still have to update your Franchise Disclosure Document annually to continue offering or selling franchises. All information in the Franchise Disclosure Document must be updated at least annually, and certain new information must be provided each year (including audited financial statements and the number of units existing as of the end of each fiscal year).
Material Change or Event
If a material change or event occurs in the franchise system or with the franchisor, state and federal law also requires you to update your Franchise Disclosure Document and file it with certain states within a certain time period after this material change or event occurs—even if your franchise offering is not yet due for renewal.
Also, as mentioned in Step 6 – State Registration(s) & Sale of Franchises, if state law requires it, we will file and register, with the appropriate state agencies, any advertisements used in the offer or sale of franchises. Filing of advertisements can be done at any time during the year, provided, they must be filed prior to being used in 8 states.
Previous: Step 6 – State Registration(s) & Sale of Franchises