Registration or Filing Required?
Yes (Registration)

Business Opportunity Laws?

Washington is a franchise registration state. So, you must register your FDD with the Washington State Department of Financial Institutions Securities Division prior to offering or selling franchises in the state. Washington charges a $600 fee for the initial registration application and a $100 fee for amendment or renewal applications. Renewal applications must be done annually at least 15 days before the registration expiration. 

Washington defines a franchise as an agreement in which:

  1. The buyer is granted the right to offer, sell, or distribute goods or services under a marketing plan prescribed by the seller;
  2. The operation of the business is substantially associated with a trademark or other commercial symbol designating, owned by, or licensed by the seller; and
  3. The buyer pays a franchise fee.

Franchises are subject to Washington’s Franchise Investment Protection Act, and must be registered whenever the franchisee is a resident of the state or the franchisee’s business will be located in the state. Additionally, you must register your franchise in Washington if an offer to sell your franchise is directed to the state or accepted in the state. Offers to sell a franchise originating in Washington are only subject to the Act if they violate franchise or business opportunity laws of the state they are directed to.

Registering in Washington is now done through their online application system. Washington generally requires audited financial statements but depending on the situation may accept phasing-in the use of audited financial statements or ones prepared in accordance with generally accepted accounting principles.

To renew your franchise registration in Washington, you must submit a renewal application in the same online portal as the initial registration. If you fail to renew your registration before your registration expiration date, you must complete a Franchise Reapplication, which has the same requirements, except that the fee is $600.

Washington does have registration exemptions, the majority of which relate to the transfer of a franchise by a franchisee. You should discuss all registration and exemptions possibilities with your franchise attorney as they are complex, and Washington has some of the active examiners. 

Washington’s Franchise Investment Protection Act also has numerous provisions that impose additional obligations on the franchisor. Here are several of the actions it prohibits a franchisor from doing:

Additionally, all third-party brokers who sell franchises in Washinton must register with the state of Washington. If you use brokers, you should obtain their broker’s registration information.