States in Which Franchise Registration is Required and of Those Registration States, Which Ones May Impose an Impoundment Obligation or Some Other Form of Financial Assurances
Contact us at the Law Offices of Richard Franzblau LLC, today to schedule a no-cost initial consultation.
1. California Initial Filing Fee: $675
Impoundments. The franchisor must demonstrate its present financial ability to meet its obligations to the franchisee. Otherwise, the Commissioner will impound all initial fees paid by the franchisee to the franchisor. The franchisor may avoid an impound if an increase in franchisor's capitalization shows financial ability to meet its proposed obligations or by posting a surety bond. An impound may also be avoided by an adequate Guarantee of Performance, coupled with the Guarantor's audited financial statements which shall be included along with the Guarantee in the FDD. These financials must show the Guarantor's financial ability to meet the franchisor's obligations.
2. Hawaii Initial Filing Fee: $125
§16-37-5 impoundments. The director may order the impoundment of franchise fees if the director finds that such requirement is appropriate to protect the prospective franchisee. Depository Funds subject to an impoundment shall be placed in a separate trust account with a bank or a fiduciary company authorized to do business in this state and acceptable to the director. A written consent of the depository to act in such capacity shall be filed with the director.
3. Illinois Initial Filing Fee: $500
If, after examination of the financial statements of the franchisor and the duties and obligations of the franchisor contained in the franchise or other agreement to furnish goods and/or services to assist its franchisees in establishing and opening their business, the administrator determines that adequate financial resources are not available to the franchisor for the performance of said obligations or that the franchisor will depend primarily on the initial franchise fees paid by franchisees as such financial resources (the franchisor has no other apparent source of income or assets), the administrator will require the franchisor at the franchisor's option to assure financial capability by one of the following means: an escrow of funds, guaranty of performance, the posting of a surety bond, the issuance of a Certificate of Deposit, or the deferral of the initial franchise fees until the franchisor has met its obligations to the franchisee and the franchisee has commenced doing business.
4. Indiana Initial Filing Fee: $500
5. Maryland Initial Filing Fee: $500
Imposition of escrow condition. At any time after the submission of a registration statement and upon a finding that it is necessary and appropriate for the protection of prospective franchisees or sub-franchisors, the Commissioner may require a franchisor to escrow franchise fees and other funds paid by a franchisee or sub-franchisor until the franchisor's obligations under the offering have been satisfied. Also possible is a surety bond, certificate of deposit and deferral of fees.
6. Michigan Initial Filing Fee: $250
7. Minnesota Initial Filing Fee: $400
When an impoundment is imposed under Minnesota Statutes 1973 Supplement, Section 80C.05, 100 percent of franchise fees and all other funds paid by the franchisees or sub-franchisors located in Minnesota for any purpose shall, within two business days of the receipt of such funds, be placed with the depository until the Commissioner takes further action pursuant to Minnesota Statutes 1973 Supplement, Section 80C.05. All checks shall be made payable to the depository. In lieu of the imposition of an impoundment under Minnesota Statutes 1973 Supplement, Section 80C.05, a franchisor may post a surety bond in such amount as shall be required by the Commissioner.
8. New York Initial Filing Fee: $750
If the Department of Law finds that the franchisor has failed to make adequate financial arrangements to fulfill its obligation to provide real estate, improvements, equipment, inventory, training or other items included in its offering, the department may impose an escrow of up to the full amount of the franchise fees and other funds paid by the franchisee or sub-franchisor until the franchisor's obligations are fulfilled. In lieu of the imposition of an escrow, a franchisor may post a surety bond of a surety company in the amount required by the department as protection of the franchisees requires.
9. North Dakota Initial Filing Fee: $250
The Commissioner will require one form of financial assurances for those initial start-up franchise registrations that submit unaudited opening balance statements.
10. Rhode Island Initial Filing Fee: $600
11. South Dakota Initial Filing Fee: $250
12. Virginia Initial Filing Fee: $500
The commission may require as a condition of registration: the escrow or deferral of franchise fees and other funds paid by the franchisee to the franchisor until the franchisor's pre-opening obligations are fulfilled.
13. Washington Initial Filing Fee: $600
The director may, by rule or order, require as a condition to the effectiveness of the registration the impound of franchise fees if he or she finds that such requirement is appropriate to protect prospective franchisees. When an impound condition is imposed in connection with the registration of a franchise offering, 100 percent of franchisee fees and all other funds paid by the franchisees or sub-franchisors for any purpose shall within 48 hours of the receipt of such funds be placed with the depository until the director takes further action pursuant.
14. Wisconsin Initial Filing Fee: $400
Franchise Filing States
Connecticut $400
Florida $100
Kentucky $0
Maine $25
Nebraska $100
North Carolina $250
South Carolina $100
Texas $25
Utah $100
Contact Us for a Consultation with a Kissimmee Disclosure Document Lawyer
Our office is in Orlando, Florida. Mr. Franzblau is licensed to practice law in Florida, New Jersey, Pennsylvania, Washington, D.C. and New York State. If you would like to speak to Mr. Franzblau, or have any other questions about a business agreement or franchise registration matter, please contact our franchise law firm. We will respond promptly. It is our goal to be accessible to our clients.
From our law offices in Florida, we advise and advocate for clients across the nation.
