The Attorney General provides Consumer Alerts to inform the public of unfair, misleading, or deceptive business practices, and to provide information and guidance on other issues of concern. Consumer Alerts are not legal advice, legal authority, or a binding legal opinion from the Department of Attorney General.
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McDonalds, Burger King, and Dunkin Donuts are three popular franchise operations. The Michigan Franchise Investment Law defines a "Franchise" as follows:
445.1502(3) "Franchise" means a contract or agreement, either express or implied, whether oral or written, between 2 or more persons to which all of the following apply:
A franchisee is granted the right to engage in the business of offering, selling, or distributing goods or services under a marketing plan or system prescribed in substantial part by a franchisor.
A franchisee is granted the right to engage in the business of offering, selling, or distributing goods or services substantially associated with the franchisor's trademark, service mark, trade name, logotype, advertising, or other commercial symbol designating the franchisor or its affiliate.
The franchisee is required to pay, directly or indirectly, a franchise fee.
A franchisor is the person who sells the franchise while a franchisee is the person who buys and operates the franchise.
Franchisees are not required to register with the Department of Attorney General, Franchise Section. You may try contacting the county clerk's office and ask for city tax rolls to find out who pays taxes at that property.
To check if a franchisor is currently registered to sell franchises in the State of Michigan, you may call 517-335-7567 and provide the name of the franchisor.
The Attorney General's Office does not endorse any franchisor, and we cannot provide you with legal, business, or financial advice. If you would like to check on a franchisor's complaint history (that is, the number of complaints on file with the Consumer Protection Division, Franchise Section), you may call 517-335-7567 and ask if there are any complaints on file about a particular franchisor.
For some additional tips on how to shop for a franchise, you may wish to refer to the Michigan Guide for Prospective Franchisees or the FTC website.
In general, franchisors must register with the Department of Attorney General, Franchise Section, prior to offering or selling franchises in the State of Michigan. This registration is referred to as a "Notice of Intent." The Notice of Intent should be typed on the franchisor's letterhead and the correct format to be used is as follows:
It is helpful if the franchisor also includes a brief description on the the type of business they will operate in the Notice of Intent.
A check in the amount of $250.00 payable to the State of Michigan must accompany the Notice.
The Michigan Department of Attorney General, Franchise Section, does not review franchise disclosure documents (FDDs) for compliance with state or federal law. Michigan is a "notice only" state, meaning the law only requires that franchisors register with the Attorney General once a year if they wish to offer or sell franchises in the State of Michigan.
A copy of the Michigan Franchise Investment Law (MFIL) MCL 445.1501 et seq. can be found on the Michigan Legislature website. The Michigan Administrative Code related to the Michigan Franchise Investment Law can be found on the Michigan Department of Licensing and Regulatory Affairs, Michigan Administrative Code website.
Franchisors should do their best to comply with both federal and state laws regarding disclosures. The Federal Trade Commission (FTC) has published helpful guidance on how to comply with their amended FTC Franchise Rule. The FTC's Franchise Rule Compliance Guide can be found on the FTC's Business Center website.
Michigan does not review FDDs, and the Attorney General's Office cannot provide you with legal advice. You should do your best to comply with state and federal law, and section 8, paragraph 3 discusses placement of the Michigan disclosure page. Page 26 of the FTC's Franchise Rule Compliance Guide also discusses suggestions on how to comply with both state and federal disclosure requirements.
No. Michigan law only requires registration once a year. If you are already registered to sell franchises, that registration lasts for one year. If you are not registered to sell franchises, and you wish to offer or sell franchises in the state of Michigan, you must register.