Texas Franchise Law and FDD Registration

Texas Franchise Law

Texas has not enacted franchise specific laws and is not a franchise registration state. However, Texas has enacted Business Opportunity Laws and, before offering or selling a franchise in Texas, you must first file a one-time Business Opportunity Exemption Notice with the Texas Secretary of State. By filing an exemption notice, you are certifying that you have a properly issued Franchise Disclosure Document (FDD) that complies with the Federal Franchise Rule. Once you file your one-time exemption notice you may sell franchises in Texas under a properly issued and compliant FDD.

To learn more about registering your FDD in Texas and how we can help, give us a call at (718) 979-8688 or contact us.

Texas Franchise Law, Business Opportunity, and FDD FAQs

Who Regulates Franchises in Texas?

Texas has not enacted franchise laws but has enacted business opportunity laws, and the Texas Secretary of State regulates and oversees the enforcement of the Texas Business Opportunity Act.

Does the Texas Business Opportunity Act Apply to Franchises?

The definition of a “business opportunity” under the Texas Business Opportunity Act is broad and includes franchise relationships. However, if you maintain a current and valid FDD and are in compliance with the Federal Franchise Rule (learn more about the Federal Franchise Rule) and the FTC’s FDD disclosure requirements, you may claim an exemption to the business opportunity laws. Once an exemption notice is filed, you will be in compliance with Texas’s business opportunity laws.

What Should I Include with My Texas Franchise Filing?

You are required to file the Business Opportunity Exemption Notice that is referred to as Form 2703. When filed, it provides the Texas Secretary of State with the required information necessary to claim an exemption to the Business Opportunity Investment Act. Information included in the exemption notice:

• The name of your franchise company;

• Any assumed names of your franchise system;

• The principal business address of your franchise company;

• Authorized signature affirming that your franchise offering is in compliance with the Federal Franchise Rule and regulations issued by the FTC; and

• Check payable to the Secretary of State in the amount of $25, representing the exemption notice filing fee.

Where Is the Texas Franchise Exemption Notice Filed?

Business opportunity exemption notices are sent to:

Texas Secretary of State
Registrations Unit
P.O. Box 13193
Austin, TX 787-3193

What If I Don’t Have a Current or Compliant FDD?

Then the exemption will be invalid, and you will be required to comply with the Texas Business Opportunity Act, which requires registration of your business opportunity and a pre-sale disclosure process.