The main rules for franchising are federal. The Federal Trade Commission developed a rule requiring the use of the Franchise Disclosure Document or FDD when selling franchise businesses. In what I call the Franchise Registration States, the FDD must be provided to the state administrative agency so it can be reviewed for compliance with the FTC rule in addition to that states franchising rules. Some other states regulate the sale of business opportunities, and require that franchisors file a form to be exempted from those rules. I call these states the Franchise Filing States and because the FDD is not reviewed, these registrations are approved much faster and the filing fees are much lower.
