Maine Franchise Law and FDD Registration

Maine Franchise Law

The State of Maine is a non-registration state for franchisors with a federally registered trademark and is a franchise filing state for franchisors without a federally registered trademark. Maine has not enacted franchise specific laws or regulations. However Maine has issued regulations related to the offer and sale of business opportunities and requires the issuance and pre-sale disclosure of a disclosure document before selling a business opportunity. Business opportunities must be registered in Maine. Under Maine's Business Opportunity Regulations although most franchises fall within the definition of a business opportunity (thereby potentially triggering Maine's business opportunity filing requirements ), if a franchise system's principal trademarks are registered at the federal level then the franchise offering will be exempt from filing requirements in Maine. If a franchise systems principal trademarks are not registered at the federal level then the franchise system must file its FDD with Maine's Office of Securities, pay a filing fee of $25, and, at the discretion of the state, post a bond or place funds in escrow. Business opportunity filing need to be renewed annually.

Who Regulates Franchises in Maine?

Maine has not enacted franchise laws but has enacted business opportunity laws. The Office of Securities of Maine's Department of Professional and Financial Regulation oversees and enforces Maine's business opportunity regulations. The mailing address for the Office of Securities is 121 State House Station, Augusta, ME 04333 for USPS mailings and 76 Northern Avenue, Gardiner, ME 04345 for UPS and FedEx. Their phone number is (877) 624-8551.

Does Maine's Business Opportunity Regulations Apply to Franchises?

Yes they do and, in most instances, the determination of whether or not you should file your FDD with the Office of Securities will be determined by whether or not your trademark is registered with the United States Patent and Trademark Office.

What Needs to be Filed with the Office of Securities?

If you don't have a federally registered trademark and are not exempt from Maine's Business Opportunity Regulations then you must file your FDD with the Office of Securities. You will be required to pay a filing fee of $25 and, in all likelihood, before authorizing your sale of franchises in the State of Maine, the Office of Securities will require that you post a bond or establish an escrow acceptable to the state. Your filing with the State of Maine must be updated annually and the renewal fee is $10. Under Section 4695 of Maine's Business Opportunity Regulations sellers of business opportunities (including non-exempt franchisors without a federally registered trademark) are required to "...obtain either a surety bond issued by a surety company authorized to do business [in Maine] or have established an escrow account with a licensed bank or savings institute located in [Maine]. The Surety Bond or escrow shall be in an amount of not less than $30,000."

If your franchise system does maintain a federally registered trademarks and is exempt from Maine's business opportunity regulations no filing is required. However, the regulators at the Office of Securities nevertheless recommend and appreciate the filing in the form of a notice whereby you advise them of your intention to sell franchises in the state and provide them with your USPTO trademark registration number. This notice may be in the form of a simple letter addressed to the examiners.