Under the federal franchise laws, at the national level, a franchisor's FDD will automatically expire and require renewal within 120 days of the franchisor's fiscal year end. If your fiscal year is the same as a calendar year this means that your FDD will expire and require renewal on April 30th of each year. At the state level, within the franchise registration states, FDD expiration and renewal dates vary depending on prior year registration and state specific requirements.
Below is a state-by-state overview of FDD expiration dates and when your FDD must be renewed:
Resolving Conflicts Between Federal and State FDD Expiration, Renewal and Update Requirements
The federal franchise rule applies nationally to each and every state, including the franchise registration states. No matter the state, your FDD will expire and must be updated within the 120 day fiscal year end period, including within franchise registration states where your state specific annual registration may, depending on when you filed for registration, extend beyond the 120 day fiscal year end period. Federal law pre-empts state law and this means that even if your state specific FDD registration is effective beyond the 120 day fiscal year end period, you must nevertheless update your FDD and file for renewal within the registration states.
Example: If, for example, your franchise company operates on a fiscal calendar year basis and your most recent Virginia state registration occurred on October 1st. Under the federal 120-day rule, your FDD will expire on April 30th. Even though under Virginia law your registration lasts for one year and will remain effective until October 1st, as of April 30th your FDD will have expired and you must stop selling franchises in Virginia on April 30th. In this example, prior to April 30th the appropriate course of action is to file for FDD registration renewal with Virginia. At the time of making this filing you could request that Virginia change the effective date of your registrations so that it is in sync with the federal 120-day requirement.
Other FDD Update Requirements
In addition to the annual FDD update and renewal requirements, if there is a material change in the information reported or disclosed in your FDD, you must update your FDD. Once updated, you will be required to update your state registrations through a post-effective amendment process. If a change relates to facts or information that would influence the decision-making process of a reasonable franchisee then you should consider such change as material and as one that triggers an FDD update. Changes in information related to your Item 19 Financial Performance Representations must be made immediately.
Need help renewing your FDD this year? Contact us to learn about how we can help.
Learn more about State Franchise Laws and Registration Requirements.
