What is franchise advertising?

Franchise advertising is advertising directed to prospective franchisees regarding the sale of a franchise.

What states require a Franchisor to file franchise advertising?

California, Maryland, Minnesota, New York, North Dakota, and Washington State require franchisors to file franchise advertising before it can be used. 

Do I have to file internet advertising with the state?

Internet advertising on a website is generally exempt; however, California requires an exemption to be filed yearly.  Further, Minnesota, New York, and Washington require notice of the URL used for franchise advertising.    

Can my advertising include a Financial Performance Representation (“FPR”)?

Maryland and Minnesota do not allow Franchisors to use FPRs in franchise advertising.  Otherwise, the information in the advertising should be consistent with the information in Item 19.  Further, the FTC requires that FPRs in all advertising, including radio, television, magazines, newspapers, billboards, and the Franchisor’s website also include the following information:

• the number and percentage of outlets that met or exceeded the represented results;
  
  
• the time period in which the results were achieved; and
  
  
• a clear and conspicuous admonition that a new franchisee’s results may differ from the represented performance.

Can I put FPRs in Social Media Advertising?

Digital advertising may not fall under the basic internet exemption.  Therefore, franchisors should not direct digital franchise advertising to any registration state where the company is not registered.   Before directing internet advertising into a states, franchisors should comply with the state’s specific guidelines. 

Should a Franchisor put a disclaimer on its website?

Yes, we recommend a disclaimer such as:

This franchising information is not intended as an offer to sell a franchise or the solicitation of an offer to buy a franchise.  Certain states regulate the offer and sale of franchises.  If you are a resident of one of these states, we will not offer or sell you a franchise unless and until we have complied with the applicable presale filing, registration, and disclosure requirements in your state.

Does a Franchisor have to include their name and address in franchise advertising?

Yes, the name and address must appear in all advertising.

Are there any other state requirements?

Minnesota requires the state’s franchise registration number to be included in advertising. 

New York requires certain disclosures in franchise advertising, depending on the type and length of the advertisement you are using.