Registration or Filing Required?

Business Opportunity Laws?

Tennessee is not a franchise registration state nor a franchise filing state, so you may offer or sell your franchise without registering or filing your FDD with the state, provided that you are compliant with the Federal Franchise Rule. Despite not being a registration or filing state, Tennessee has enacted laws which generally prohibits the franchisor from terminating the franchise agreement without good cause and without giving the franchisee 30 days to cure defaults.

Specifically, franchisors must comply with Tennessee’s franchise relationship laws and the FTC Franchise Rule requiring FDD issuance and disclosure 14 days prior to the signing of a franchise agreement or acceptance of any fees. Once a franchise relationship is established Tennessee Code 47-25-15, et. seq., prohibits franchisors from undertaking certain actions related to the termination, non-renewal, or modification of franchise rights within the state. Franchisors must undertake their franchisee relationship actions in good faith, afford franchisees cure opportunities and other rights set forth in the code.

Violations of Tennessee’s franchise relationship laws entitle franchisees equitable and legal relief for damages, including attorney fees. Additionally, the laws restrict a franchisor’s ability to not renew a franchise agreement without good cause, and without providing 60 days’ notice to the franchisee. The law also nullifies any terms of the franchise agreement in which a franchisee waives its rights governed by the Tennessee Franchise Law. The law limits the franchisor’s ability to prohibit transfers of the franchised business by a franchisee.