Louisiana Franchise Filing and FDD Registration

Louisiana Franchise Law

Louisiana is not a franchise registration state but has enacted business opportunity laws that apply to franchisors that do not have a federally registered trademark. In Louisiana, if you have a federally registered trademark and you have issued your FDD in compliance with the federal franchise laws you are not are not required to register or file your FDD with a Louisiana state agency or regulator. If you are a franchisor and your primary trademark is not registered with the USPTO you will be required to comply with Louisiana's Business Opportunity Laws, including the requirement that you consent to jurisdiction in the State of Louisiana.

Louisiana's Business Opportunity Law

Louisiana's Business Opportunity Law broadly defines a "business opportunity" as "...the sale or lease for an initial required consideration exceeding three hundred dollars of any goods or services which are transferred to a purchaser for the purpose of enabling the purchaser to start a business..." Exempt from the Louisiana Business Opportunity provisions are transactions involving "...the sale or lease of a sales plan or marketing program made in conjunction with the licensing of a registered trademark or service mark..." In practice this means that if you are a franchisor with federally registered trademarks then you are exempt from Louisiana's Business Opportunity Laws as long as you comply with the federal franchise rule. If you do not have a federally registered trademark then you must comply with Louisiana's Business Opportunity laws. Compliance depends on the nature of your franchise system and, at the most basic level, will require the filing or a Business Opportunity Consent to Service of Process with the Louisiana Secretary of State.

If you franchise involves (a) "assist[ing] the purchaser in finding business locations on premises neither owned nor leased by the purchaser or seller for the use or operation of vending machines, racks, display cases, currency-operated amusement machines, or other similar devices"; (b) involves a representation by your franchise company or an affiliate that you "...will purchase any or all products to be sold, made, produced, fabricated, assembled, grown, bred, or modified by the [franchisee]...; or (c) guarantees that the franchisee will derive a certain level of income, then you will also be required to post a surety bond. The Consumer Protection Section of Louisiana's Department of Justice is charged with enforcing Louisiana's business opportunity laws.