How to Register a Franchise

Deciding to become the owner of a franchise requires a number of related steps, including establishing a business entity through which you operate the enterprise. If the franchise is to operate in more than one state, there is also a registration requirement in each of these states. The registration process--both for establishing certain types of business organizations and to conduct operations in a particular state--normally is accomplished through the Secretary of State's office.

Things You'll Need

• Franchise agreement
• Articles of incorporation
• Articles of organization
• Partnership agreement

Instructions

1. Review the franchise agreement to determine what type of business structure is acceptable within the terms of that contract. For example, determine if you can organize your franchise as a sole proprietorship, corporation, limited liability company or some other structure.

2. Prepare the appropriate type of organizational document to structure the business. These are:

   Corporation: Articles of Incorporation
   Limited Liability Company: Articles of Organization
   Partnership: Partnership Agreement
   Sole Proprietorship: No specific document required to organize

3. Contact the Secretary of State's office to obtain standard form for Articles of Incorporation or Articles of Organization. The Secretary of State maintains these types of forms in its brick-and-mortar office and through the agency's website.

4. Prepare Articles of Incorporation or Articles of Organization, and file the documents with the Secretary of State.

5. Obtain a form partnership agreement, if you elect to structure your business in this manner. Office supply stores have form agreements available for your use. A partnership agreement does not need to be filed with the Secretary of State.

6. Go to the Secretary of State's office in person or online and obtain a form to register a business in your state if you establish a partnership or sole proprietorship for your franchise. Because you did not make any other type of filing with that agency, you need to register with the Secretary of State's office. The form is simple to complete and typically requires the name of the business, its principal business address and the designation of an agent for service process. The agent is the individual designated by the franchise to accept service of process if your business is sued.

7. Obtain a form from the Secretary of State for registration of a foreign business if you operate in any state beyond the one in which you established your business. This form is available over the Internet and directly from the office. The form is not complicated and requires the name of the business, where its principal office is located and the designation of an agent for service of process in that particular state. The agent for service of process must have a physical address (not a post office box) in this other state.

Tips & Warnings

• Consider engaging the services of a business lawyer to assist you in the process of registering a franchise. Although these organizations cannot make specific recommendations, the local and state bar associations do maintain directories of attorneys that practice in different areas of the law. The American Bar Association maintains contact information for these groups.

References

• "The Franchise Handbook: A Complete Guide to All Aspects of Buying, Selling or Investing in a Franchise"; Robert Hayes; 2006
• "Better Business Bureau's Buying a Franchise"; Better Business Bureau; 2007
• "Business Organizations: Cases, Problems, and Case Studies"; D. Gordon Smith & Cynthia A. Williams; 2008

Resources

• National Association of Secretaries of State