Franchising & Distribution Law Blog

On September 16, 2014, the Franchise and Business Opportunity Project Group of the North American Securities Administrators Association (“NASAA”) adopted a Multi-Unit Commentary (“Commentary”) that affects the disclosure of multi-unit franchise development, including traditional area development, subfranchising and area representative arrangements. This guidance must be adopted by franchisors within 120 after the fiscal year end of a franchisor with an effective Franchise Disclosure Document (“FDD”), or within 180 days for a new franchisor. Compliance with the Commentary may dramatically alter a multi-unit franchisor’s cost of compliance due to the way in which NASAA addresses one type of multi-unit development arrangement: the area representative.

The North American Securities Administrators Association, Inc. (NASAA) has released, for both public and internal comment, a proposed Multi-Unit Commentary related to disclosure of multi-unit franchising arrangements under the various state franchise disclosure laws.