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22 Franchise L.J. 1 (2002-2003)

handle is hein.journals/fchlj22 and id is 1 raw text is: LANJCHISE LAW JOURNAL A M E R I C A N SM QUARTERLY JOURNAL OF THE FORUM ON FRANCHISING BAR ASSOCIATION VOLUME 22, NUMBER I - SUMMER 2002 Tips from Leading Regulators on How to Speed Up Franchise Registrations SUSAN H. MORTON ecuring swift franchise regis- trations may seem mundane but it should always be a top priority for franchise lawyers. Experienced franchisors that must stop all franchise sales while waiting for franchise registration renewals and start-up franchisors that cannot begin selling franchis- es until their initial franchise reg- istrations take effect are like drivers making pit stops in the Susan H. Morton Indy 500. The competition is out there racing, gaining on them, and even passing them while they stand idle. Frustration rises with every additional moment of inactivity. This article, based in large part on interviews with key state franchise administrators, is designed to help franchisors and their counsel shorten their pit stops and accelerate the franchise registration process. The Basics Before offering or selling a franchise, franchisors must com- ply with the federal and state laws, rules, and regulations that require them to prepare and disseminate to prospective fran- chisees a prospectus-type disclosure document containing all of the material information necessary for an informed invest- ment decision. The federal disclosure mandate is contained in the Federal Trade Commission's (FTC) franchise rule,' which requires franchisors to make nationwide presale disclosure in a docu- ment whose format is set forth in the FTC's Interpretive Guides.2 The FTC franchise rule also permits franchisors to use the state-mandated Uniform Franchise Offering Circular Susan H. Morton is a partner in New York City's Kauftnan, Feiner, Yamin, Gildin & Robbins, LLP. The viewpoints expressed in this arti- cle are those of the author and do not necessarily reflect the opinions of Kaufman, Feiner, Yamin, Gildin & Robbins, LLP; its clients; or the officials interviewed for this article (see page 57for a complete list). (UFOC) disclosure format. Regardless of the format, the FTC franchise rule requires no registration or advance review of franchise disclosure documents by the FTC. Although the FT1C permits franchisors to use the UFOC, the fifteen states with franchise disclosure laws will not accept a disclosure document that is formatted according to (continued on page 46) In This Issue Tips from Leading Regulators on How to Speed Up Fr-anchise Registrations.................1I Susan H. Morton Scottsdale to Welcome 25th Annual 1Forum1 In October.............................. 2 Susan1 Grucleeber Twko Sides to Everiy Story7 ...................... 3 Edward Wood D1nha Franchise RenewalsYou Want M0e to Do W'hat? ....4 Charles S. Modell and Gen4,vieve A. Beck SleepingTioe? BUsiness Method Patent Pr1otection for Franchise Systems.................. 9 GregoryV Rosenblatt, ChristIina K. Peterson, and Jody L DeStefanis Proving Lost Profits Thr-ough Lay Opinion Testimony-Is the Back Door Still Open...........15 Martin G. Gilbert Achieving ~Victory Through Prearrangements-: Supplemlenting- Covenants Not To Compete .........21 Ric hard E. Johnson and Richard G GreenstIein Good Faith and Fair Dealing: A Primer onl the Differences Between the United States and Canada ... . 37 JaeCohien and Larry Weinberg F;RANCHISING CURRENTS ............. 61 Michael J. Lockerby, James R. Sims III, and Deborah S. Coldwell hL

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