Submitted by lushenejj on
As we approach the renewal season for calendar-year-end franchisors, franchisors and their counsel should be mindful of the requirements of the Multi-Unit Commentary (“Commentary”) issued by the North American Securities Administrators Association (NASAA) on September 16, 2014. All franchisors must be in compliance with the Commentary by March 15, 2015 (see the Commentary for exceptions and further details).
In particular, disclosure for unit franchise programs and area representative programs (also sometimes referred to as regional developers or development agents) may no longer be combined in a single FDD or a single state registration. You will need to create separate FDDs for each program and register each program separately if you haven't already done so. This means that a franchisor that has previously obtained a single registration for both programs must revise the existing registered FDD to disclose only the unit franchise program. The franchisor will need to create a separate FDD for the area representative program and file for a new registration for that program.