Hawaii Franchise Filing and FDD Registration: Hawaii Franchise Laws

Hawaii Franchise and FDD Registration FAQ’s

Who Regulates Franchises in Hawaii?

The Business Registration Division of the Hawaii Department of Commerce and Consumer Affairs regulates and oversees enforcement of Hawaii’s Franchise Investment laws including FDD registration and filing requirements and enforcement of Hawaii’s franchise relationship laws.

Where are Hawaii FDD Registration and Renewal Applications Filed?

Applications for initial FDD registration, annual renewals, and amendments are filed at:

State of Hawaii
Department of Commerce and Consumer Affairs
Business Registration Division
335 Merchant Street, Room 205
Honolulu, Hawaii 96813

The Division’s telephone number is (808) 586-2722

What Should I Include with My Hawaii Franchise Registration Application?

The franchise registration application should include:

• Filing fee of $250 payable to the “Commissioner of Securities”;

• Cover letter clearly stating the name of the applicant, the enclosed documents, the fiscal year of the applicant, and an acknowledgment that the franchise filing will “expire three months after the fiscal year end”;

• Hawaii State Specific Application for Filing Franchise Offering Circular;

• Uniform Franchise Registration Application with Certification form;

• Consent to Service of Process. This consent form must be specific to the State of Hawaii and cannot be based on the universal consent to service of process form;

• Corporate Acknowledgment;

• Franchise Seller Disclosure Form;

• Franchisor’s Costs and Source of Funds Form; and

• One complete hard copy of the Franchise Disclosure Document.

The filing fee is $200 for all franchise registration applications including initial registrations, renewal registrations and FDD amendments.

What Is the Definition of a Franchise in Hawaii?

Section 482E-2 of the Hawaii Franchise Investment Law applies a community of interest standard and defines a franchise, as:

“…an oral or written contract or agreement, either expressed or implied, in which a person grants to another person, a license to use a trade name, service mark, trademark, logotype, or related characteristic in which there is a community of interest in the business of offering, selling, or distributing goods or services at wholesale or retail, leasing, or otherwise, and in which the franchisee is required to pay, directly or indirectly, a franchise fee.”

Are There Exemptions to Hawaii’s Franchise Registration Requirements?

Yes, there are limited exemptions to Hawaii’s franchise registration requirements. Before relying on any registration exemption, you must carefully review the facts with your franchise lawyer. Section 482E-4 of the Hawaii Franchise Investment Law identifies, Hawaii’s registration exemptions, which include:

• Motor vehicle franchises;

• Out of state transactions where the offer and sale of the franchise relates to a prospective franchisee domiciled outside the State of Hawaii and where the franchised outlet will be located outside the State of Hawaii;

• The extension or renewal of an existing franchise or the substitution of a modified or amended franchise agreement where there is no interruption in the operation of the franchise business of the franchisee and where there is no material change in the franchise relationship;

• The transfer of the location of a franchisee where there is no interruption in the operation of the franchise business of the franchisee and where there is no material change in the franchise relationship; and

• The offer or sale of an additional franchise to an existing franchisee of the same franchisor.

Are There Franchise Relationship Laws in Hawaii?

Yes. In addition to being a franchise registration state, Hawaii is also a “franchise relationship state”. This means that Hawaii has implemented laws that give franchisee’s additional rights that go beyond the terms of their franchise agreement. When dealing with franchisees in the State of Hawaii, Franchisors must be aware of Hawaii’s franchise relationship laws and the additional franchisee protections that it affords. Hawaii’s franchise relationship protections are extensive and include the imposition of good faith standards, and prohibitions as to activities of franchisors involving disparate treatment of franchisees, disclosure of rebates and kickbacks, prohibitions against actions that are unreasonable and arbitrary and others. Hawaii’s franchise relationship laws are contained in Section 4832E-6 of the Hawaii Franchise Relationship Law.