Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION NEWS: Virginia Adopts Franchise Rule Revisions That Will Require Filing Electronic Copies of Disclosure Document, (Feb 25, 2013)

By Peter Reap, J.D., LLM

The Virginia State Corporation Commission’s Division of Securities and Retail Franchising, on February 13, 2013, adopted revisions to a number of Virginia’s Retail Franchising Act Rules, including an amendment that will require franchisors to provide text-searchable electronic copies of their Franchise Disclosure Document (FDD), in addition to a paper copy, when applying for registration, amendment, and renewal. The current regulations permit franchisors to file an electronic version of their FDDs at their option.

Most of the revisions are minor, but add clarification in some instances, according to the Division. The revisions will become effective on March 1, 2012.

Other changes include:

• An amendment to require a franchisor to amend its effective registration within 30 days after the occurrence of a material change.

• Requiring a franchisor wishing to take advantage of the “seasoned franchisor” exemption to provide an auditor’s report that has not been modified with a going concern paragraph.

• Requiring franchisors to retain and make available to the Commission upon request a sample copy of each materially different version of the franchisor’s FDD for three years from the close of the fiscal year in which the FDD was last provided to a prospective franchisee.

• Adoption of the North American Securities Administrators Association, Inc.’s Guarantee of Performance Form in lieu of the current Virginia form.

News: FranchisingDistribution VirginiaNews