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What business licenses does a franchisor need to secure?

On Behalf of | Aug 21, 2023 | Uncategorized |

Starting a franchise offers advantages that make it an appealing option. When you opt for a franchise, you gain an automatic license to utilize the brand and its operating methods. However, while it allows you to leverage the franchise’s branding and business strategies, you are still running an independently owned business. And there are licenses you need to secure to operate.

Federal and state regulations

As a franchisee, you do not usually have to register in your state. The franchisor takes care of the business licenses needed. About thirteen states make franchisors register if they are selling a franchise, but Florida is not one of them.

However, per state law, you must still receive a document called the franchise disclosure document (FDD) that explains everything about the franchise from your franchisor.

Other legal and regulatory requirements

Different states and industries mandate various licenses. Below are some examples of licenses that you might need to secure before embarking on your franchise journey.

  • Business operation license
  • Local business permits
  • Sales tax license
  • Health and safety compliance
  • Professional licenses
  • Signage permits

Also, do not forget about your franchise agreement. It is not a license per se, but it is the foundation that sets the stage for your franchise experience.

After obtaining licenses, remember that compliance is an ongoing commitment. You may need renewals and updates to keep your licenses current and your franchise thriving.

Starting your journey

While the path to buying a franchise is exciting, it requires navigating a licensing landscape to ensure legal compliance. Here, your franchisor can serve as your guide. They can offer legal support to secure the necessary licenses for your specific franchise. Consulting resources like the U.S. Small Business Administration website may help you identify state-specific licenses. You can also count on advice from legal professionals.