Kentucky
Franchise Registration
Kentucky
Kentucky is not a franchise registration state but does require either a Business Opportunity Trademark Exemption or a Business Opportunity filing prior to offering or selling franchises or business opportunities in the state.
Kentucky Franchise Laws
Kentucky does not require franchisors to register a Franchise Disclosure Document (“FDD”) before offering or selling franchises. However, franchisors must comply with the Federal Trade Commission (FTC) Franchise Rule, which requires providing a current FDD to prospective franchisees at least 14 calendar days before execution of any agreement or payment of any consideration.
Kentucky Franchise Relationship and Termination Laws
Kentucky does not have franchise relationship or termination laws. The terms of the franchise agreement and general contract law principles govern franchise relationships, renewals, transfers, and terminations.
Kentucky Business Opportunity Laws
Kentucky regulates business opportunities under KRS §§ 367.801–367.819. A “business opportunity” includes the sale or lease of products, equipment, supplies, or services for the purpose of enabling a consumer investor to start a business when:
- The seller obtains an initial required consideration of not less than $500;
- The seller represents that the buyer will or is likely to earn a profit exceeding the initial investment;
- The seller represents that assistance will be provided in finding locations; or
- The seller represents that there is a guaranteed market or buy-back arrangement.
If a franchise offering qualifies as a business opportunity under Kentucky law, the franchisor must either:
- File a one-time Franchise Exemption; or
- Register as a Business Opportunity Seller if the exemption does not apply.
Sellers of business opportunities must register with Kentucky, provide the required surety bond or other security, and file the disclosure document and other information required by KRS § 367.805. For non-exempt business opportunity sellers, Kentucky requires payment of an initial $150 registration fee, an annual $50 renewal fee, and a $25 amendment fee, as set forth in KRS § 367.805. Registered business opportunity sellers must renew their registration annually.
Purchasers have statutory cancellation rights under KRS § 367.819, including the right to cancel for any reason at any time before midnight of the thirtieth calendar day after signing the contract, as well as additional cancellation rights for certain statutory violations.
Franchise Exemption from Business Opportunity Laws
Franchisors who meet the FTC definition of a franchise and comply with the FTC Franchise Rule are exempt from Kentucky’s Business Opportunity Act requirements if they file the Affidavit of Business Opportunity Exemption with the Office of the Attorney General (the “Franchise Exemption”) as provided by KRS § 367.807.
This exemption applies only when the franchisor:
- Meets the FTC’s definition of a franchise;
- Has complied with all FTC Franchise Rule disclosure and timing obligations; and
- Files the required Affidavit of Business Opportunity Exemption.
Requirements for Submitting a Kentucky Franchise Exemption
To obtain the Franchise Exemption, franchisors must submit a one-time Affidavit of Business Opportunity Exemption along with a copy of the franchisor’s current FDD. There is no filing fee. Kentucky does not require annual renewal of the Franchise Exemption. If there are material changes that affect eligibility, franchisors should update their Franchise Exemption filing.
More information about Kentucky's
Business Opportunity Laws
You can learn more about Kentucky’s Business Opportunity requirements at this page:
Kentucky Business Opportunity Statutes
Kentucky Business Opportunity Regulations
Kentucky Business Opportunity Exemption Form
If you offer a business opportunity in Kentucky, we can help you determine whether and how your company must comply with Kentucky’s Business Opportunity Laws.
If you would like to learn more about our franchise services and franchise compliance in Kentucky, contact us or call (757) 263-4596 to schedule a consultation. You can also visit our interactive map to explore franchise laws in other states.
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