The Franchise and Business Opportunity Project Group of the North American Securities Administrators Association, Inc. (“NASAA”) has authorized the release, for public comment, of a proposed Multi-Unit Commentary addressing the interpretation of franchise disclosure regulations for certain multi-unit franchising arrangements that have become common in franchising.
The proposed Commentary provides uniform definitions for three categories of multi-unit franchising arrangements and provides guidance for disclosing those arrangements in franchise disclosure documents. The Commentary addresses specific disclosure questions raised by franchise attorneys and state franchise examiners about multi-unit franchising.
In my view, this is excellent and needed work. The Commentary clears up many disclosure issues which are not clearly addressed in FTC or state regulation. Once finalized, it will hopefully provide some clarity and consistency between the states. The guidance provided in the Commentary is practical and balanced – a must read for anyone in the franchise industry.
The comment period began on October 15, 2013 and remains open for 30 days.
To obtain a copy of the proposed Franchise Multi-Unit Commentary and further information on submitting comments, visit www.nasaa.org and and click on “nasaa proposals.”