Delaware Franchise Law and FDD Registration

Delaware Franchise Law

Delaware does not have any franchise registration laws and is considered a non-registration state. Franchisors interested in offering or selling franchises in Delaware do not need to register or file anything with the state of Delaware to begin selling. Federal franchise laws are still applicable and must be followed.

The only franchise law in Delaware is the Delaware Franchise Security Act. The Delaware Franchise Security Act does not contain franchise registration or franchise filing requirements for the state of Delaware. Instead, this law is there to provide protection for the relationship between the franchisee and seller franchisor.

Preparing to Sell Franchise Locations in Delaware

Prior to selling a franchise in Delaware the franchisor must make sure they have a Franchise Disclosure Document (FDD) and that it contains the proper information. The FDD is a legal document that is required by all franchise businesses in the United States regardless of the state they are franchising a business in. The FDD must adhere to current Federal Trade Commission franchise laws. A franchise disclosure document contains a large amount of information about various aspects of your franchise business and, because of this, it is best to find a franchise lawyer to help with this process. If you desire to sell franchise locations outside of the state of Delaware a franchise lawyer can also help with state specific franchise laws in other states.

Federal Franchise Laws Applicable in Delaware

The Federal Trade Commission requires that a franchisor provide a copy of the current franchise disclosure document 14 days or more prior to the sale date in order to remain compliant with federal franchise laws. For the full FTC franchise law you may visit the Federal Trade Commission’s website.