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The Franchise Memorandum

Franchise Registration States Make Accommodations to Filing Deadlines Because of the COVID-19 Pandemic

Most franchise registration states (including the exemption notice states of Florida and Utah) have adopted, formally or informally, COVID-19 accommodations relating to franchise and exemption filings, and the offer and sale of franchises. Lathrop GPM’s Franchise and Distribution Group has prepared the chart below to summarize the various accommodations. In preparing this chart, our group reached out to the franchise registration states for input and reviewed all of the notices, orders, and releases the states have issued to date. States continue to update and add to their franchise-related accommodations, and our group will monitor these changing accommodations and update our chart accordingly. You can access the most-current version of our chart, which includes additional content, here.

The accommodations described in our chart only relate to the franchise registration states and, at their core, allow franchisors to submit franchise and exemption renewal filings at a later date without penalty. In a few of the franchise registration states, including Illinois, Maryland, and New York, a franchisor is allowed under limited circumstances to offer (but not sell) franchises during the extension period. However, as a general rule, once a franchisor’s original expiration date has occurred, the franchisor should cease offering and selling franchises in that state until it obtains an effective registration of its updated FDD in that state. As for the “non-registration states,” unless the FTC decides to modify its requirement that franchisors update their FDDs within 120 days of their fiscal year end, franchisors will not be able to offer and sell franchises in those states after the 120-day period without an updated FDD.

(Current as of April 9, 2020)

State  COVID-19
Notice, Order
or Release
Filing Type
(Electronic or
Hard Copy)
Comments
California Notice to Securities and Franchise
Filers
(3/22/2020)
CA Notice
Electronic or
Hard Copy
The state did not extend the deadline for submitting renewals nor grant an extension for existing registrations. However, the state is waiving the additional $225 filing fee for franchise renewals filed after the renewal deadline but by June 30, 2020, strongly urging franchisors to submit electronic renewal filings, and allowing the use of documents signed electronically using DocuSign, without notarization, if submitted as part of an electronic filing.
Florida Emergency Order 2020-02
(3/26/2020)
FL Order
Electronic (but
initial filings
must be Hard
Copy)
The state tolled renewal deadlines that occur in the months of March or April, 2020 for a period of 45 days from the original renewal deadline, and no late fees will be assessed.
Hawaii Release: Franchise Filings Deadline
Extended
(3/29/2020)
HI Release
Electronic or
Hard Copy
The state extended the deadline for submitting franchise renewal filings to April 30, 2020. Franchisors are encouraged to file online using the state’s new portal to facilitate timely review. Based on discussions with the state, it is our understanding that the extended deadline does not alter the requirement that a franchisor must include in its FDD financial statements that are current within 90 days of the date of filing.
Illinois Notice to Franchisors
(4/06/2020)
IL Notice
Hard Copy The state granted to franchisors with franchise or exemption registrations that expire between April 1, 2020 and June 1, 2020, an automatic 60-day extension from their anniversary date to submit their renewal filing without penalty.
Indiana Administrative Order
(4/07/2020)
IN Order
Electronic The state automatically extended to June 30, 2020, the effective period of any existing franchise registration that was set to expire
between March 16, 2020, and May 31, 2020. Any renewal must be filed prior to the renewal deadline.
Maryland Order:
Extension of Franchise Registration
(3/17/2020)
MD Order
Hard Copy The state granted an automatic extension of the effective dates of franchise registrations and exemptions of effective franchise offerings in the state for a time period equal to 30 days after the date the state’s Governor declares the end of the “Coronavirus State of Emergency.” During the Coronavirus State of Emergency, a franchisor may offer (but not sell) franchises using an updated FDD under certain limited circumstances.
Michigan None Hard Copy Because renewal filings consist of the submission of an unsigned notice of intent and filing fee and no FDD, there is no need for the
state to make an accommodation.
Minnesota Regulatory Guidance 20-10
(3/30/2020)
MN Guidance
Electronic or
Hard Copy
The state extended to June 30, 2020, the deadline for franchisors to submit renewal filings that were due by April 30, 2020. Franchisors are strongly encouraged to file online. The renewal fee and a hard copy of the online submission confirmation page must still be mailed to the Minnesota Department of Commerce.
New York Notice of Coronavirus Conditional
Relief – Franchise Filings
(3/24/2020)
NY Notice
Hard Copy The state granted an extension to existing franchise registrations and exemptions that would have expired between March 1, 2020
and April 30, 2020 (the “Relief Period”). The extension is to a date 90 days from the end of the Relief Period. A franchisor may continue to use its old FDD to offer (but not sell) franchises
during the Relief Period. However, once a franchisor submits a renewal or amendment filing the franchisor must cease using its old FDD and may only offer (but not sell) franchises under its updated FDD until the state reviews its renewal or amendment application and notifies the franchisor that its updated FDD has been accepted. A franchisor filing an initial franchise registration application may not offer or sell franchises until the state reviews the application and notifies the franchisor that its FDD has been accepted. All filings are required to be submitted by email in addition to the paper and/or CD filings.
North Dakota Emergency Notice No. 2020-02
(3/30/2020)
ND Notice
Hard Copy The state granted to franchisors registered with the state an extension of up to 30 days to perform any of their registration filing requirements under the state’s franchise law and related regulations. Franchisors are allowed to submit renewals via email (one per email), with the file number and franchisor name in the subject line of the email. Franchisors must mail the filing fee to the state along with a copy of the filing cover letter.
Rhode Island None Electronic Franchisors should notify state of late filings and consider paying renewal fees as close to the expiration date as possible. Indications are that late fees will not be charged for registrations due in March and April 2020.
South Dakota None Hard Copy The state will not penalize franchisors if renewals are filed late.
Utah None Electronic The state will not penalize franchisors if renewals are filed late.
Virginia

First Order
(3/17/2020)
VA Order

Second Order
(4/02/2020)

VA Order

Hard Copy In its first order, the state granted an automatic extension to franchise and exemption registrations that are due to expire while the “Judicial Emergency Declaration” is in effect. The registrations were extended for a period of 21 days or such other time period as may be subsequently ordered. In its follow-up extension orders, the state extended its previous extensions for the pendency of the Judicial Emergency Declaration or such other time period as may be subsequently ordered.
Washington

Notice Concerning Franchise Filing
Requirements and Renewal Filing Fees

(4/08/2020)
WA Notice

Electronic The state is allowing applicants to pay the $100 renewal filing fee to complete an application for franchise registration for any offering that was previously registered and that expired, or that
will expire, between March 1 and June 30, 2020, and keeping the $100 exemption filing fee at $100. Franchisors are reminded that
all franchise filings must be submitted electronically, and notary requirements are being temporarily waived. Importantly, franchisors are not permitted to offer or sell franchises during a period in which their franchise registrations have lapsed.
Wisconsin None Electronic Business as usual. It is worth noting that the initial and renewal filing fee in the state are the same.
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The information contained in this post is provided to alert you to legal developments and should not be considered legal advice. It is not intended to and does not create an attorney-client relationship. Specific questions about how this information affects your particular situation should be addressed to one of the individuals listed. No representations or warranties are made with respect to this information, including, without limitation, as to its completeness, timeliness, or accuracy, and Lathrop GPM shall not be liable for any decision made in connection with the information. The choice of a lawyer is an important decision and should not be based solely on advertisements.

About this Publication

The Franchise Memorandum is a collection of postings on summaries of recent legal developments of interest to franchisors brought to you by Lathrop GPM LLP. 

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