FRANCHISING IN TEXAS
Registration or Filing Required?
Yes (Filing)
Business Opportunity Laws?
Yes
Texas is not a franchise registration state but does require a one-time filing for franchisors planning to offer or sell franchises in the state. Texas defines a business opportunity as a sale or lease of products, equipment or services, for more than $500, that will be used by the buyer to begin a business in which the seller represents one of the following:
- The buyer is likely to earn a profit exceeding the purchase price,
- The seller will provide or assist the buyer in finding a location for the use or operation of the products equipment or services,
- The seller will provide a sales, production or marketing program, or
- The seller will buy back products, equipment or supplies purchased or produced by the buyer.
The Texas Business Opportunity Act governs the sale of business opportunities in the state and requires those selling business opportunities to register with the state. Franchisors that are using a properly issued FDD are exempt from registering under the Act, but must first submit an Exemption Notice and a one-time $25 filing fee to the Texas Secretary of State Registrations Unit at P.O. Box 13193, Austin, TX 78711. The notice requires franchisors to provide a list of all the names under which they intend to do business and their principal business address. The exemption notice does not have a term or expiration date; it is a one-time filing. However, a franchisor should notify the Texas Secretary of State in writing if the franchisor changes its principal business address. There is no fee for an address update.