What You Need to Know About Franchising
Overview of Franchise Laws in Michigan
Franchising in Michigan operates under a clear framework of regulations aimed at maintaining fairness and transparency between franchisors and franchisees. Michigan is one of the easier states to file in but it does take on average about six weeks to receive approval. Michigan is a “notice filing state” meaning the state requires a notice filing but does not actually review the FDD.
In Michigan, franchisors must register a notice of intent with the Office of the Attorney General and pay an initial registration fee of $250. There is also an annual renewal fee of $250. Notably, the state does not require a review of the Franchise Disclosure Document (FDD) prior to registration.
Michigan Franchise Filing Fees
$250
Initial
$250
Renewal*
$0
Amendments**
*Renewal filings must be submitted prior to the current registration’s expiration or Michigan may require the submission of a statement of no sales for the period where registration lapsed.
Overview of Franchise Laws in Michigan
Franchising in Michigan operates under a clear framework of regulations aimed at maintaining fairness and transparency between franchisors and franchisees. Michigan is one of the easier states to file in but it does take on average about six weeks to receive approval. Michigan is a “notice filing state” meaning the state requires a notice filing but does not actually review the FDD.
In Michigan, franchisors must register a notice of intent with the Office of the Attorney General and pay an initial registration fee of $250. There is also an annual renewal fee of $250. Notably, the state does not require a review of the Franchise Disclosure Document (FDD) prior to registration.
Key Regulatory Requirements
- Initial Registration: Franchisors are required to submit a notice of intent to sell franchises, along with the $250 filing fee.
- Annual Renewal: The registration must be renewed annually, with a renewal fee of $250. Filings must be submitted before the registration expires to avoid complications.
- Amendments: There is no fee for amendments to existing registrations.
The filing fee for initial filings must be paid via check made out to the “State of Michigan.” Approval of filings typically occurs within a couple of weeks, as the FDD is not required for submission.
Potential Legal Challenges for Michigan Franchisors
Franchisors in Michigan may encounter several legal challenges, including:
- Ensuring compliance with state-specific registration requirements.
- Timely management of renewals and amendments to their FDD.
- Adhering to advertising guidelines set forth by the state.
- Providing necessary financial assurances as stipulated by Michigan law.
Importance of Legal Counsel in Drafting Franchise Agreements
At Spadea Lignana, we recognize legal counsel’s vital role in drafting, reviewing, and negotiating franchise agreements. This encompasses:
- Assisting with compliance and registration requirements to minimize legal issues.
- Handling negotiations and disputes with franchisees to protect your interests.
- Advising on intellectual property protection and licensing to secure your assets.
Selecting a Michigan Franchise Attorney: Factors to Consider
Choosing the right legal partner is essential for franchisors. Important considerations include:
- Experience and Expertise: Look for attorneys who have proven expertise in franchise law.
- Client Testimonials: Seek positive reviews from previous clients to gauge satisfaction.
- Communication Style: Ensure that the attorney is responsive and willing to collaborate closely with you.
Benefits of Hiring a Franchise Attorney
Engaging a knowledgeable franchise attorney offers several advantages:
- Minimizes Legal Risks: Helps ensure that your franchise operates within legal boundaries.
- Ensures Compliance: Keeps you informed about state and federal regulations.
- Protects Intellectual Property: Safeguards your brand and proprietary information.
Frequently Asked Questions for Franchisors
What Are the Typical Costs Associated With Hiring a Franchise Lawyer?
Costs can vary based on your specific needs. Our CORE program provides reasonable flat fees for ongoing legal support.
How Long Does It Take to Draft a Franchise Agreement?
The timeline can differ, but our efficient processes aim to streamline drafting to meet your business deadlines.
Can a Franchise Lawyer Assist With Franchise Expansion Strategies?
Yes, we offer strategic advice on expansion while ensuring compliance with relevant laws.
What Common Legal Pitfalls Should Franchisors Be Aware Of?
Franchisors must remain vigilant regarding registration requirements, advertising guidelines, financial assurance obligations, and keeping their FDDs current. Michigan’s process is generally straightforward, but timely filings are key to avoiding delays.
At Spadea Lignana, we understand the complexities of franchise laws in Michigan. We aim to help you navigate these regulations effectively, ensuring your franchise’s success while minimizing potential legal risks.
Notes
The filing fee for initial filings must be made via check made payable to “State of Michigan”.
We will draft a letter providing notice to the state that you intend to sell franchises there and providing a description of the concept.
Michigan filings do not require submission of the FDD and the filing is typically approved within a couple of weeks.
The filing fee for initial filings must be made via check made payable to “State of Michigan”.
We will draft a letter providing notice to the state that you intend to sell franchises there and providing a description of the concept.
Michigan filings do not require submission of the FDD and the filing is typically approved within a couple of weeks.
The manufacturing industry employs more than 18% of Michigan’s workforce.
(statisticalatlas.com)
Michigan boasts a low corporate tax rate – 6% flat!
(michiganbusiness.org)
Michigan is #1 for its concentration of engineers in the country and is home to over 250,000 skilled trade workers.
(michiganbusiness.org)
Michigan Franchise Exemptions
Flat Fee Program for Franchisors
Spadea Lignana’s CORE program for franchisors is a cost-effective and practical solution for the ongoing legal needs of franchisors, including but not limited to, FDD updates, state registrations and franchise agreement executions. Through a proprietary cloud-based system we can effectively and efficiently manage FDD Disclosures and Franchise Agreement executions for fair flat fees billed monthly. We believe that hourly billing, although necessary in certain circumstances like complex M&A deals and litigation, can weigh on the relationship between client and attorney. By coming up with a fair flat monthly fee, the uncomfortable negotiating of whether or not a 6 minute increment in your bill for replying to an email was legitimate goes away.
Attorneys Who Understand MI Franchise Law
Franchise laws vary from state to state, and it can be difficult to understand the requirements. Spadea Lignana has streamlined the process to ensure you remain compliant as you grow nationally.
We also work with franchises in Indiana, Pennsylvania, New York, New Jersey, New Hampshire, Vermont, and Massachusetts.
