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Franchises

Franchises

Franchises

What is a Franchise?

McDonald's, Burger King, and Dunkin' Donuts are Popular Franchises

The Michigan Franchise Investment Law defines "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.
Cheese Beef Burger consists of Bun Bread, Patty, Pickle, Onion, Mayonaisse, Ketchup and Cheddar Cheese in a yellow background

Franchisors

You Must Register to Sell

Before offering or selling franchises in Michigan, you must register with the DAG. This registration is referred to as a "Notice of Intent."
  1. Write a Notice of Intent. This should be printed on your company's letterhead.
  2. Include these details:
    • Your company's name.
    • Your business name, if different. This includes dba's.
    • Your main business address.
    • Add a short description on the type of business they will operate.
  3. Write a check for $250.00 to the State of Michigan.
  4. Send the Notice and check to the DAG.     
    Department of Attorney General
    Corporate Oversight Division, Franchise Section
    525 W. Ottawa Street
    P.O. Box 30736
    Lansing, MI 48909
  5. Remember to do this every year.

Learn More in the Michigan Guide for Prospective Franchisees (PDF)

 

Franchise Disclosure Documents

The DAG does not review Franchise Disclosure Documents (FDDs) for compliance with state or federal laws. Michigan is a "notice only" state.

Franchisors only need to register once a year.

You can find the Michigan Franchise Investment Law on the Michigan Legislature website. And the rules related to this law can be reviewed here.

Franchisors should try their best to comply with federal and state laws about disclosures. The Federal Trade Commission (FTC) offers helpful guidance on how to follow the amended Franchise rules and can be found on their website.

Michigan Disclosure Page

The DAG does not review FDDs. And, the DAG can’t give you legal advice.

You should try your best to comply with state and federal laws.

Section 8, paragraph 3 discusses placement of the Michigan disclosure page.

The FTC's Consumer’s Guide to Buying a Franchise Guide gives tips on how to follow both state and federal rules.

Franchisees

How To Know if a Franchise is a Good Investment

The DAG doesn't endorse franchisors. And we can’t give you legal advice.

You can call and check to see if a franchisor has any complaints. Our Franchise section phone number is 517-335-7567.

The Consumer’s Guide to Buying a Franchise can help provide tips on how to buy a franchise.

How To Know if a Franchisor is Registered

You can contact the Franchise section to know who is registered. They can be reached at 517-335-7567.

You will need to give them the name of the franchisor.

How To Find Out Who Owns a Franchise

Franchisees are not required to register.

You may try contacting the county clerk's office and ask for city tax rolls to find out who pays taxes at that property.