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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