Nebraska
Franchise Registration
Nebraska
Nebraska is not a franchise registration state. However, many franchise offerings qualify as business opportunities under Nebraska law. As a result, franchisors whose franchise offerings qualify as business opportunities under Nebraska law must either file a one-time Notice of Exemption or, if the exemption does not apply, register as a Business Opportunity Seller.
Nebraska Franchise Laws
Nebraska 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.
Nebraska Franchise Relationship and Termination Laws
Nebraska regulates the franchise relationship through the Nebraska Franchise Practices Act (Neb. Rev. Stat. §§ 87-401 to 87-410). The Act makes it unlawful for a franchisor to terminate, cancel, or fail to renew a franchise without good cause. “Good cause” is limited to the franchisee’s failure to substantially comply with lawful franchise requirements.
Notice Requirements
- Franchisors must provide at least 60 days' written notice of termination, cancellation, or intent not to renew, stating all reasons.
- 15 days' prior notice is permitted in the case of voluntary abandonment.
- Termination may be immediate upon notice if the grounds for termination are: conviction of the franchisee of an offense directly related to the franchise business; insolvency, the institution of bankruptcy or receivership proceedings, default in payment of an obligation, failure to account for the proceeds of a sale of goods by franchisee to the franchisor or a subsidiary of the franchisor; falsification of records or reports required by the franchisor; existence of imminent danger to public health or safety; or loss of the right to occupy the premises.
Transfer of Franchise
A franchisee must give written notice by certified mail to the franchisor before selling or assigning a franchise. The franchisor has 60 days to approve or disapprove the transfer. If no response is given, approval is deemed granted. (Neb. Rev. Stat. § 87-405)
Remedies
Franchisees may bring an action for damages and injunctive relief for violations of the Act and may recover reasonable attorney’s fees and costs. (Neb. Rev. Stat. § 87-409)
Nebraska Business Opportunity Laws
Nebraska regulates business opportunities under the Seller-Assisted Marketing Plan Act (Neb. Rev. Stat. §§ 59-1701 to 59-1762). A “seller-assisted marketing plan” (business opportunity) includes the sale or lease of products, equipment, supplies, or services for the purpose of enabling a purchaser to start a business when:
- The seller offers or assists in finding locations or outlets for vending machines, racks, display cases, or similar devices;
- The seller offers to purchase from the purchaser any goods made using the seller's materials or equipment;
- The seller represents that the purchaser will earn income exceeding the initial payment;
- The seller promises a refund or repurchase option if the purchaser is dissatisfied; or
- The seller provides a sales or marketing program to help the purchaser generate income.
If a franchise offering qualifies as a business opportunity under Nebraska law, the franchisor must either:
- File a one-time Notice of Exemption; or
- Register as a Business Opportunity Seller if the exemption does not apply.
Sellers of business opportunities must register with the Nebraska Department of Banking and Finance, provide the required surety bond or other security, and file the disclosure document and other information required by Neb. Rev. Stat. §§ 59-1724 and 59-1733 to 59-1740. For non-exempt business opportunity sellers, Nebraska requires payment of an initial $100 registration fee, an annual $50 renewal fee, and a $50 amendment fee. Registered business opportunity sellers must renew their registration annually.
Purchasers have statutory cancellation rights under Neb. Rev. Stat. § 59-1743, including the right to cancel for any reason within three business days after signing the contract, as well as additional cancellation rights for certain statutory violations. If the seller represents that the purchaser’s initial payment is secured or that the seller provides a buy-back arrangement, the seller must maintain a surety bond or trust account of at least $50,000 (and up to $300,000 depending on volume) pursuant to Neb. Rev. Stat. § 59-1751.
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 Nebraska’s Seller-Assisted Marketing Plan Act requirements if they file a Notice of Exemption with the Nebraska Department of Banking and Finance (the “Notice of Exemption”) as provided by Neb. Rev. Stat. § 59-1722.
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 Notice of Exemption.
Requirements for Submitting a Nebraska Notice of Exemption
To obtain the franchise exemption, franchisors must submit a one-time Notice of Exemption. There is a $100 filing fee. Nebraska does not require annual renewal of the exemption. If there are material changes that affect eligibility, franchisors should update their exemption filing.
More Information About Nebraska's Franchise and Business Opportunity Laws
For more information on Nebraska’s Business Opportunity requirements, visit:
Nebraska Business Opportunity Statutes
Nebraska Department of Banking and Finance - Business Opportunities & Franchises
Nebraska Franchise Notice of Exemption
If you offer a business opportunity or franchise in Nebraska, we can help you determine whether and how your company must comply with Nebraska’s Business Opportunity Laws.
If you would like to learn more about our franchise services and franchise compliance in Nebraska, 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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