Fees

$500 Initial
$250 Renewal*
$0 Pre-Effective Amendment**
$100 Post-Effective Amendment**

*Renewal filings must be submitted before the expiration date or Virginia will require the filing be resubmitted as a new initial filing with payment of the initial fee.

**Post-Effective Amendment filings must be submitted if you are making a material change to your FDD after your initial or renewal filing is approved.  Pre-Effective Amendment filings are submitted if you are making a material change to your FDD but your initial filing or renewal filing is not yet approved.  No further sales may be made in Virginia until the amended FDD is approved and the registration is effectively amended.

Notes

  • The preferred method for filing in Virginia is through an online portal created by the industry for registration states. The filing fees are also paid through the portal via ACH.  You will be required to complete and submit an ACH authorization form to us before we will submit the filing for you.  Transaction fees apply for each filing with the current rate being $100 per.
  • Virginia requires audited financials in every FDD filed in the state. The state may also require the submission of unaudited financials to supplement the audit in certain circumstances.
  • No deals may be closed in Virginia until the initial, renewal or amendment filing is approved, and all Virginia prospects must be disclosed/redisclosed with the approved FDD.
  • Financial Assurance – If the Commission finds you do not have adequate financial arrangements to fulfill your obligations to franchisees, the Commission will require an escrow condition, fee deferral or the posting of a surety bond.

Exemptions (from registration with the state and/or from disclosure with a specific prospect)

  • Large Franchisors – exemption from registration only
    • Three elements must be met:
      1. Net equity (audited) of no less than $15,000,000 or $1,000,000 (unaudited) and you are at least 80% owned by a corporation or entity that has net equity of no less than $15,000,000 (audited) and the 80% owner guarantees your performance
      2. Your auditor’s report does not include a going-concern warning
      3. You or any 80% owner of you or your predecessor, or any combination of the above, has had at least 25 franchisees conducting substantially the same franchise business to be offered or sold for the entire five-year period immediately preceding the offer or sale
    • Filing is required at least ten days prior to any offer under this exemption in order to claim the exemption and a copy of your FDD must be included. The exemption must be renewed each year by filing a renewal with the state at least ten days before the expiration date.  The exemption will automatically be void if there is a material change in your situation which renders any of the three elements above no longer applicable.  Amendment filings are required if there is a material change but the exemption is still applicable.
    • Fees:
      $500 Initial
      $250 Renewal
      $100 Amendment
  • Sales to Existing Franchisees – exemption from registration only
    • Where you are making an offer or sale of an additional franchise to an existing franchisee, and where (a) the additional franchise is for the franchisee’s own account, (b) the franchisee has operated, for at least two years, a franchise that is substantially the same as the franchise being offered or sold, and (c) the prior sale to the franchisee was a registered or exempt sale in Virginia.
    • No filing or fees are required
  • Renewal of an Existing Agreement – exemption from registration and disclosure
    • Where you are renewing or extending an existing franchise, and where (a) there is no interruption in the operation of the franchised business, and (b) there is no material change in the franchise relationship
    • No filing or fees are required
  • Sales by Existing Franchisees – exemption from registration and disclosure
    • Where (a) the franchisee is not an affiliate of yours, (b) the sale is for the franchisee’s own account, (c) the franchisee sells its entire franchise, and (d) the sale is not effected by or through you
    • No filing or fees are required
  • Institutional Franchisee – exemption from registration only
    • Where the offer or sale is to a bank, savings bank, savings and loan association, trust company, insurance company, investment company, or other financial institution, or to a broker-dealer, and (a) the purchaser is acting for itself or in a fiduciary capacity and (b) the purchase is not for resale
    • Filing is required at least ten days prior to any offer under this exemption in order to claim the exemption and a copy of your FDD must be included.  The exemption must be renewed each year by filing a renewal with the state at least ten days before the expiration date.  If there is a material change, amendment filings are required in order to maintain the exemption.
    • Fees:
      $500 Initial
      $250 Renewal
      $100 Amendment
  • Substantial Investment – exemption from registration only
    • Offer or sale of a single unit franchise in which (1) actual minimum total investment is greater than $3,000,000 based on Item 7 of the FDD, (2) prospective franchisee is represented by legal counsel, and (3) you reasonably believe the prospective franchisee has sufficient knowledge and experience and is capable of evaluating the merits and risks of purchasing the franchise
    • Filing is required at least ten days prior to any offer under this exemption in order to claim the exemption.  A copy of your FDD must be included with the filing along with a signed certification from the prospect verifying the grounds for the exemption.  The exemption must be renewed each year by filing a renewal with the state at least ten days before the expiration date.  If there is a material change, amendment filings are required in order to maintain the exemption.
    • Fees:
      $500 Initial
      $250 Renewal
      $100 Amendment
  • Non-Franchisor Exemptions – The following exemptions are for atypical franchise offerings, are very rare, and in general, will not apply to you if you are an active franchisor with an FDD.
    • Nominal Fee
    • Leased Department
    • Gasoline Distributors
    • Oral Franchise
    • Motor Vehicles

Please email fieldguide@spadealaw.com if you have any suggestions, comments, correction or additions for the Field Guide. The purpose of the Field Guide is to create an organic, ever expanding resource of best practices for franchisors and your feedback and input is always welcome.