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. QUESTIONS AND FURTHER INFORMATION Questions concerning franchise registration should be directed to the Minnesota Department of Commerce at the address and telephone number provided in the Resource Directory section of this Guide. Refer to the Minnesota Franchise Act and Minn. Rules 2860. The North American Securities Administrators Association, Inc. (NASSA) UFOC Guidelines (including forms) can be downloaded from a link on the Minnesota Department of Commerce at Franchises.
EVALUATING A BUSINESS OPPORTUNITY
SOME GENERAL CONSIDERATIONS When buying an existing business, investing in a franchise, or beginning a new business, the entrepreneur should thoroughly evaluate the business opportunity he or she is considering. This step is very important but often overlooked; many times, a person’s hopes for a business cloud his or her judgment. It is not uncommon for an entrepreneur to invest a substantial sum in a business without analyzing whether the business opportunity is a viable one. In addition, it is not uncommon for an unscrupulous business promoter to take advantage of such an entrepreneur.
79
Made with FlippingBook - Online Brochure Maker