The North American Securities Administrators Association (NASAA) is proposing model language for states to use to promulgate exemptions from registration and disclosure provisions under current state franchise laws in four categories: (1) a fractional franchise exemption; (2) an experienced franchisor exemption; (3) a set of three sophisticated purchaser exemptions; and (4) a discretionary exemption. The proposal incorporates certain elements of existing exemptions already followed in several franchise registration states and recent changes in the FTC Rule on Franchising, but seeks to help franchisors achieve uniformity throughout the states.
NASAA sought public comment on the proposed exemptions in July. Only six comments were received, but among them were comments submitted by Larkin Hoffman’s Chuck Modell. Chuck's comment letter can be read here and the proposed exemptions can be read here. NASAA will now consider the comments received, hopefully modify the proposed exemptions to address the comments and either issue a revised proposal if any comments are accepted, or adopt the original proposal and send it to the states.