Virginia, like many other states, has specific laws and regulations governing franchise relationships.
The primary law concerning franchises in Virginia is the Virginia Retail Franchising Act (VRFA).
Here are the key points regarding franchise laws in Virginia:
- Virginia Retail Franchising Act (VRFA): The VRFA outlines the requirements for the registration and disclosure of franchise offerings in the state. It mandates that franchisors must register their franchise offerings with the State Corporation Commission (SCC) before offering or selling franchises in Virginia.
- Franchise Disclosure Document (FDD): Franchisors must provide a Franchise Disclosure Document (FDD) to potential franchisees at least 14 days before the franchise agreement is signed or any payment is made. The FDD contains crucial information about the franchise opportunity, including the franchisor’s background, fees, obligations, territory, and other essential details.
- Registration Requirements: Prior to offering or selling a franchise in Virginia, franchisors need to file their FDD with the SCC and have it approved. The FDD registration is valid for one year and must be renewed annually.
- Franchise Relationship: The VRFA defines the rights and obligations of both franchisors and franchisees, setting guidelines for their relationship. It includes provisions regarding termination, non-renewal, transfer of ownership, and dispute resolution.
- Exemptions: Certain types of franchises might be exempt from registration under the VRFA, such as large investment franchises, fractional franchises, and certain types of established businesses.
- Enforcement and Penalties: Failure to comply with the VRFA can result in legal action by the SCC. Penalties for violating the law can include fines, injunctions, and other legal remedies.
For anyone considering franchising in Virginia, it’s crucial to ensure compliance with the VRFA. Seeking legal counsel from attorneys experienced in franchise law is highly recommended to navigate the registration, disclosure, and operational aspects in accordance with Virginia’s franchise laws.
Virginia Franchise Office
State Corporation Commission
1300 E. Main St.
Richmond, VA 23219
804-371-9733 or 1-866-722-2551