I begin this column by stating where I am going with this piece. I am going to put franchise sales legislation and regulation under the microscope, and ask the penetrating question of whether it is, or is not, necessary. (Similar questions should be asked about franchise relationship legislation, but I will leave that for a future column.)
First, a quick history lesson. Franchise legislation is celebrating its 40th anniversary this year. Back in 1970, neither the federal government nor any state had laws that governed franchise sales generally. The California Franchise Investment Law, enacted that year, was the prototype for franchise sales regulation. (Twenty-four states also have statutes governing the sale of business opportunities, which by definition frequently are broad enough to cover franchises, but that, too, is a subject for discussion on another day.) Today, there are 15 state laws affecting franchise sales generally. Only one state, New York, has enacted a franchise sales protection statute since 1975. Carry on reading this post.
