FRANCHISING IN KENTUCKY
Registration or Filing Required?
Yes (Filing)
Business Opportunity Laws?
Yes
Kentucky is a franchise filing state, and franchisors are exempt from registration if their business meets the federal definition of a franchise. Franchisors can file for exemption by submitting a one-time application certifying that they meet the FTC’s definition of a franchise.
The Kentucky Business Opportunity Act (Section 801), defines a business opportunity as a sale of goods or services exceeding $500 in which the goods or services enable the buyer to start a business, and the seller represents that the buyer will earn or is likely to earn a profit, and:
- The seller knows the market and demand will allow buyer to earn profit,
- The seller will provide locations or assistance in finding locations for the business, or
- The seller represents there is a guaranteed market, or the seller will buy back products made by buyer using items sold by seller
Business opportunities must be registered in the state prior to offering or selling said opportunities. However, the Act specifically exempts businesses that qualify as a franchise under the FTC’s rules from the registration requirements. In order to rely on the exemption, a franchisor must mail a copy of its FDD and a completed Affidavit of Business Opportunity Exemption to the Kentucky Office of the Attorney General. This is a one-time filing and does not need to be done annually, but franchisors must submit an update if there is a change in their address. There is no fee for filing an exemption.