Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION NEWS: Virginia Proposes Franchise Rule Revisions That Would Require Filing Electronic Copies of Disclosure Document, (Nov 28, 2012)
Organizations Mentioned:North American Securities Administrators Association
By Peter Reap, J.D., LLM
The Virginia State Corporation Commission’s Division of Securities and Retail Franchising has proposed a number of revisions to Virginia’s Retail Franchising Act Rules, including an amendment that would require franchisors to provide electronic copies of their Franchise Disclosure Document (FDD) 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 proposed revisions are minor, but add clarification in some instances, according to the Division. The Division has recommended to the Commission that the proposed revisions should be considered for adoption with a proposed effective date of March 1, 2012.
Other proposed 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.
Comments or requests for hearing on the proposed revisions must be submitted in writing to Joel H. Peck, Clerk of the Commission, c/o Document Control Center, P.O. Box 21 18, Richmond, Virginia 23219, on or before January 15, 2013. Any request for hearing should state why a hearing is necessary and why the issues cannot be adequately addressed in written comments. All correspondence should contain reference to Case No. SEC-2012-00040. Interested persons desiring to submit comments electronically may do so by following the instructions available at the Commission's website: http://www.scc.virginia.gov/case.
News: FranchisingDistribution VirginiaNews