"(1) the offer indicates that the franchise is not being offered to residents of the state; (2) the offer is not directed to any person in the state by or on behalf of the franchisor or anyone acting with the franchisor's knowledge, and (3) no franchise is sold in the state by or on behalf of the franchisor until the offering has been registered and declared effective and an offering circular delivered to the prospective purchaser in compliance with the state's franchise law."
The States of Indiana, Maryland and Connecticut have, through regulation and order, provided the required language similar tot he NASAA language above for franchisors to include on Internet websites. In those states, the offer of a franchise or business opportunity via the Internet (assuming the three specified conditions above are met) will not trigger the application of the registration statutes by the Internet advertising alone. If the prospective franchisor receives some inquiries from prospective franchisees concerning the Internet advertisement, the franchisor must register the offering in the applicable states before having any face to face discussions with the prospect or sending any advertising materials in to the state.
It is advisable for a franchisor not registered or exempt under all of the franchise registration states to adhere to and specifically include the NASAA disclaimer language in all Internet communications and to keep Internet advertising as non-specific as possible so that communication does not constitute an offer of a franchise under any state law.
In addition to the required language as indicated in the Connecticut, Indiana and Maryland statutes, the NASAA proposed disclaimer indicated above should be directed to the following states:
California Florida Hawaii Illinois Kentucky Maine
Michigan Minnesota Nebraska New York North Carolina
North Dakota Rhode Island Wisconsin South Carolina
South Dakota Texas Utah Virginia Washington
