If you are interested in forming and filing a franchise for your existing business, there are several important legal issues to consider.
Business Opportunity vs. Franchise
There are two areas of law in this respect, namely, business opportunity and franchise law. “Business opportunity,” which is legally known as Seller Assisted Marketing Plans, as defined under California Civil Code §1812.200 and are known as “SAMPs.” SAMPs must register with the Attorney General’s Office of each state, as required, provide disclosure statements, and provide buyers with specific notice and disclosures. The registration requirements, fees, and notice period are less than for a franchise. The Seller Assisted Marketing Plan Act was written for and aimed at seller discount buyers (think Avon, Jafra, MaryKay, Herblife) and the sale of vending machines, racks or work-at-home paraphernalia.