Are sales of franchises and business opportunities regulated in any way?
A number of states have instituted franchise and business opportunity laws. Fifteen states have laws that require franchisors to provide presale disclosures, known as “offering circulars,” to potential purchasers. Thirteen of these state laws treat the sale of a franchise like the sale of a security. Twenty-three states have business opportunity laws. These laws usually require that companies give potential purchasers a presale disclosure document that has been filed with a designated state agency.
