Virginia Franchise Laws
Virginia is classified as a franchise registration state. This designation places it among the states with the highest level of scrutiny over franchise offerings. I strongly suggest hiring Virginia Franchise Attorneys before you get too far down the franchising road.
So, before a franchisor can offer or sell a franchise in Virginia, it must file an application and its Franchise Disclosure Document (FDD) with the Virginia State Corporation Commission (SCC) for a full review and approval. This registration must be deemed effective by the SCC before any sales activity can legally commence. This state-level registration is in addition to the overarching Federal Trade Commission (FTC) Franchise Rule, which mandates a 14-day disclosure period for prospective franchisees.
The registration process in Virginia is comprehensive.
In this case, the SCC’s Division of Securities and Retail Franchising examines the franchisor’s application and FDD to ensure compliance with the Virginia Retail Franchising Act.
In this case, the commission has the authority to issue a stop order, halting the offering if the disclosure documents are found to be incomplete, inaccurate, or misleading. Once approved, the registration is effective for one year and must be renewed annually if the franchisor wishes to continue offering franchises in the state.
Finally, this annual renewal process typically requires the submission of the updated FDD and any material changes that have occurred.
In addition to governing the pre-sale process, the Virginia Retail Franchising Act also contains significant provisions that regulate the post-sale relationship between the franchisor and franchisee.
For instance, the Act provides statutory protections that supersede conflicting terms in a franchise agreement.
In a nutshell, the law establishes that a franchisor cannot terminate a franchise prior to its expiration without “reasonable cause.”
Furthermore, the Act imposes specific obligations on a franchisor if it chooses not to renew a franchise agreement.
Lastly, these relationship laws create a more regulated and predictable environment for franchisees operating within Virginia, ensuring that the terms of the contract are supplemented by statutory safeguards.
Here is a list of franchise lawyers you can hire in Virginia
Eric C. Perkins / Perkins Law, PLLC
4870 Sadler Road, Suite 300
Glen Allen, Virginia
Nicole J. Harrell / Kaufman & Canoles, P.C.
150 W Main St, Suite 2100
Norfolk, Virginia
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