OTHER ENFORCEMENT AND INFORMATION ASSISTANCE In addition to the regulation done by the State of Minnesota, the United States Federal Trade Commission (FTC) has regulatory authority over the sellers of franchises and business opportunities. Pursuant to Section 5 of the Federal Trade Commission Act, the FTC has issued its filing complaints about franchises and business opportunities. The National Fraud Information Center (NFIC) assists the FTC and state Attorneys General by entering complaints into a computerized database to help track and identify operators of frauds. Along with its enforcement activities, the FTC issues a number of articles and publications designed to educate potential buyers and sellers of franchises and business opportunities. Examples are: A Consumer’s Guide to Buying a Franchise, explains how to shop for a franchise opportunity, the obligations of a franchise owner, and questions to ask before investing ; Advertising FAQs: A Guide for Small Business , an A-Z primer focusing on the federal truth-in advertising standards: Selling a Work-at-Home or Other Business Opportunity? Revised Rule May Apply to You: and Complying with the Telemarketing Sales Rule. Articles and publications are available at FTC Business Guidance. Also available on the FTC website is information regarding Case Highlights; Compliance Documents; Laws, Rules, Reports, and Guides. EXEMPTIONS There are eight registration exemptions available under Minn. Stat. § 80C.03. These include sale of a franchise by a franchisee-owner; sales by an executor, administrator, sheriff, trustee in bankruptcy, guardian or conservator; sales to a bank or insurance company; sales of registered securities; a single isolated sale of a franchise under specified conditions; the sale of a franchise to a franchisee with specified experience in the business and who derives 80 percent or more of its sales from other sources; sale of a foreign franchise to a nonresident of Minnesota under specified conditions; and sales exempted by order of the Commissioner of the Minnesota Department of Commerce. It is strongly recommended that anyone considering the offer or sale of a franchise consult a knowledgeable attorney before relying on an exemption. FRANCHISING IN OTHER STATES Although many states regulate franchises in a manner similar to Minnesota, each state’s laws are different. Accordingly, franchisors who plan to offer or sell franchises in other states should check with appropriate officials in those states regarding their franchising laws and requirements. INTERPRETIVE OPINIONS Under Minn. Stat. § 80C.18, subd. 2, a company may request an interpretive opinion from the Minnesota Department of Commerce on whether a business being offered is a franchise, whether registration is required, and whether an exemption is available. An opinion fee is required. FEES Fees charged by the Department of Commerce for franchise-related transactions are: initial application fee, $400; annual report (renewal) fee, $200; amendment fee, $100; and opinion fee, $50.
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