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Weekly UpdatesAnd yes, unfortunately there are more fees. Each state has its individual regulations, fees and licensing requirements regarding franchising. In some states, there are no additional fees to register. Just compete your FDD and you are ready to start awarding franchises. Other states, like California, require you to submit your FDD, audited bank statements, pay a fee and possibly wait more than 30 days to be approved.
Why does each state have individual guidelines and fees? I assume states with higher costs will justify their fees because they review the FDD to help protect their citizens. And yes, they do review the FDDs submitted but they don't verify the information. I would think the entrepreneurs in Montana deserve the same protection as entrepreneurs in California. Ideally this process can become standardized by the Federal Trade Commission and there can be one set of regulations and fees for the United States as opposed to 50 different guidelines.
But until then, below is a chart of fees per state. States are split into three groups: registration states, filing states and free states. Registration states may also require evidence the business has a certain amount of funds. Registration states usually want to see two to three times your franchise fee in liquid reserves. Some states even require audited bank statements.
Filing states want to have your FDD on record and usually do not require evidence of funds. As you can see, their fees tend to be much lower than registration states. Free states are just that: free! Once your FDD is complete, you are ready to award franchises.
Please note these fees can change at any time, and registration and filling states also require a renewal fee every year. Remember, not only does each state have its individual fees, but it also has its individual set of guidelines. Make sure you meet with your franchise attorney to verify you are following all the rules for each state you will be awarding a franchise.
REGISTRATION STATES
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Rhode Island 500
FILING STATES
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