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Frequently asked questions

Franchises

I am starting a company and I want to offer franchises for sale. How do I go about doing that?

Oregon law prohibits a franchisor from offering or selling franchises in Oregon unless the franchisor delivers to prospective franchisees the disclosure statement required by the Federal Trade Commission Trade Regulation Rule set forth in 16 CFR 436 ("Franchise Disclosure Document").

The franchisor “must deliver the disclosure statement and all proposed agreements relating to the sale of the franchise to the prospective franchisee at least 14 calendar days before the prospective franchisee executes any agreement relating to the sale of the franchise or at least 14 calendar days before the prospective franchisee pays or is required to pay to the franchisor any consideration for the franchise including refundable deposits, whichever occurs first.”

OAR 441-325-0020 (2).

I want a list of all the XYZ Company franchises, where they are located, and who owns each XYZ Company franchise. Can you fax that to me?

Businesses operating in Oregon are required to register corporations and assumed business names with the Business Registry section of the Corporation Division, Oregon Secretary of State. Those records also include the name of the registered agent. You can contact the Business Registry office at (503) 986-2200. Records can also be checked online at http://www.filinginoregon.com.

I'm a lawyer from another state, and I've been reviewing your statutes governing franchises in Oregon. Does Oregon have administrative rules regulating franchises in Oregon?

The Oregon law on franchises is codified in ORS Chapter 650. The rules governing franchises are contained in OAR Chapter 441, Div. 325.

If a franchisor doesn't have to register in Oregon, what does a franchisor have to do to sell franchises in Oregon?

In addition to providing full disclosure to prospective franchisees, Oregon law also requires the franchisor to maintain a complete set of books, records and accounts of the sale and disposition of proceeds of sales of franchises. See ORS 650.010.

In reviewing my company’s files, I've found copies of Franchise Disclosure Document (FDD) filed with other states, but I can't find the one we filed with the State of Oregon. Where can I get a copy of the last FDD our company filed with your agency?

Oregon law does not require the filing of any disclosure statement, including an FDD, with the state regulator. Therefore, the Oregon Division of Finance and Corporate Securities does not accept and does not maintain franchise records pertaining to specific businesses. Oregon law requires the franchisor to maintain a complete set of books, records, and accounts of the sale and disposition of proceeds of sales of franchises. See ORS 650.010.

You might wish to contact a state that does register franchises to learn whether that state has information relevant to your inquiry. Both the states of California and Washington register franchises and may have information about a specific franchise.

California Department of Corporations
1515 K Street, Suite 200
Sacramento, CA 95814-4052
(916) 445-7205
(866) 275-2677 or 866 ASK CORP
www.corp.ca.gov/SRD/franchise.asp

Washington Department of Financial Institutions
Securities Division
PO Box 41200
Olympia WA 98504-1200
(360) 902-8700
FAX (360) 902-0524
www.dfi.wa.gov/sd/franchise.htm

Is the XYZ Company store located in my town a franchise?

Oregon law does not require the filing of franchise information with the State's Department of Consumer and Business Services. Therefore, the Oregon Division of Finance and Corporate Securities does not maintain records with information about specific franchises.

The franchisor is making demands that are not part of the deal or hasn't held up his end of the deal. What can I do about it?

Because Oregon law regulates the disclosure of information from a franchisor to a franchisee prior to a sale, the Division of Finance and Corporate Securities will investigate allegations that a particular franchisor made a materially untruthful statement and/or failed to disclose a material fact in the disclosure document. Other complaints regarding the franchise agreement are considered matters of contractual interpretation and are not within the jurisdiction of this agency.

If you have purchased a franchise and believe that the franchisor has breached the agreement, you should consult an attorney familiar with franchises and business contracts. If you need assistance in locating an attorney, contact the Oregon State Bar Lawyer Referral Service at (503) 684-3763 (Portland area) or toll-free (800) 452-7636.

Oregon Law does provide a private right of action or civil remedy for franchisees who have a claim against a franchisor. See ORS 650.020.

What is the difference between franchise regulation and franchise registration?

Oregon regulates the sale of franchises by requiring franchisors to provide certain disclosures to prospective franchisees before any sale. Other states regulate franchises by requiring franchisors to file franchise documents with the state regulator that must be approved prior to the sale of the franchise in that state.

Where can I find a sample FDD that has been filed with your agency?

Oregon law does not require nor accept the filing of any disclosure statement, including a FDD, with the Department of Consumer and Business Services.

Who is the authorized agent of the XYZ Company franchise?

For authorized agent information for businesses registered in the state of Oregon, contact the Business Registry office at (503) 986-2200 or go to http://www.filinginoregon.com.