An Overview of Franchise Law at Federal and State Level

LawThe United States of America has a unique structure of government compared to any other governments in the world. While all the states are under one Federal government, each has maintained its independence, so much so that each may enact laws it sees proper. This unique structure has borne some complications on the legal side of running a government, as it is highly probable for the federal and state legislatures to enact laws that cover the same subject matter and regulate exactly the same act.

Potential Overlap of State law and Federal Law

Theoretically, the Federal government must concern itself with matters that are national in scope – i.e., the foreign relations issues, matters of national security or foreign policies that have a direct impact on the national economy, among others. On the other hand, State government must be confined to domestic issues like crime rates or criminal prosecution. But, in reality, it is difficult to draw a clear line between the two, which may often result in overlapping laws on the same subject. A classic example would be the case of franchise laws where complex lines delineate the duties of the Federal Trade Commission (FTC) and those agencies established by local legislation.

Franchise Law

The US Federal Trade Commission or FTC is the prime federal agency that governs the grant of and/or sale of franchises. But, since grant of franchises also involves domestic affairs, State legislators have also crafted their own laws regulating the same. The degree and depth vary across America; some have stringent regulations while others do not. For instance, the franchise law Utah authorities practice as well as in the states of Illinois, Michigan and Virginia has strict implementation such that these states do not only require registration of franchise offers, but also necessitate a disclosure papers intended to provide higher levels of transparency for the protection of the potential franchisees.