Registration or Filing Required?
Yes (Business Opportunity Application or an exemption can be sought if you have a federal or state registered trademark)

Business Opportunity Laws?

South Carolina is not a franchise registration state nor a franchise filing state. However, South Carolina does have business opportunity laws that sellers of business opportunities must adhere to but some franchisors are exempt from complying with the business opportunity registration requirements laws if their franchise is the owner or licensee of a registered trademark, either in South Carolina or at the federal level.

The South Carolina Businesses Opportunity Sales Act defines a business opportunity as the sale or lease of any products, equipment, supplies or services for the purpose of enabling the buyer to start a business, where the buyer pays a fee exceeding $250, and the seller represents one of the following:

  1. That the seller will provide locations or assist the buyer in finding locations for the use or operation of vending machines, racks, display cases, or other devices;
  2. The seller will purchase products made by the buyer using the supplies or services sold to them by the seller;
  3. A guarantee that the buyer will derive income exceeding the purchase price, or will refund the buyer if they are not satisfied with the purchase; or
  4. That the seller will provide a sales or marketing program in conjunction with the agreement which will enable the buyer to derive income from the business. This does not apply to sales or marketing programs made in conjunction with the license of a registered trademark.

Franchisors may be exempt if it has a trademark registered federally or in the state of South Carolina. However, if the franchisor’s business or offer falls under subsections 1, 2 or 3 above, it will still be subject to South Carolina’s business opportunity laws. There are several other types of business listed in the state’s code of laws that do not qualify as business opportunities, but these would not apply to most franchisors. 

If a franchise has a registered trademark, either with the USPTO or the state of South Carolina (and does not otherwise qualify as a business opportunity), the franchise can seek an exemption by sending  a notice to the State of South Carolina.

If you do not have a registered trademark for your franchise or are awaiting registration, you will be subject to provisions of the Business Opportunity Sales Act which requires business opportunities to register with South Carolina, submit more stringent disclosure documents, and potentially obtain a surety bond if the opportunity guarantees profits or refunds.

The Act requires a business opportunity seller to submit a Registration Application of Business Opportunity, along with the required documents and information to the SC Secretary of State’s Office, Attn: Business Opportunities at 1205 Pendleton Street, Suite 525, Columbia, SC 29201. If a franchisor makes any guarantees about income or refunds, the Act also requires them to obtain a surety bond in the amount of $50,000. Additionally, business opportunities must place their registration number on any advertisements they make about their business opportunity.

Call us for assistance with this or any state business opportunity application or registration.