Illinois Franchise Rules

The Franchise Bureau in the Office of the Attorney General registers and monitors franchisors and brokers who seek to sell franchises in Illinois. The goal of the bureau and the Franchise Disclosure Act it administers is to provide presale disclosures and protection for prospective franchisees. The bureau provides information on the Act and rules applicable to the offering of franchises and on business and financial histories of franchisors.

IMPORTANT NOTICE:

Several important statutory changes to the Illinois Franchise Disclosure Act will go into effect on October 1, 2009. These changes increase consistency with the FTC rule. Some of the changes are highlighted below, but there are other changes. Please review the revised statute carefully for full details and contact our office with any questions.

IL SB 1285 Statute PDF Document

HIGHLIGHTED CHANGES:
Anniversary dates: Anniversary (expiration) dates will automatically become 120 days after the franchisor's fiscal year end. In order to implement this change as smoothly as possible, we will be adjusting anniversary dates accordingly as we register filings and process annual reports. However, please be aware that this new anniversary date supersedes any anniversary date that you were previously given, and therefore, you may be required to file an annual report before the expiration of your previous anniversary date.

Franchise Brokers: As of October 1, we will no longer register franchise brokers. Instead, franchisors will be responsible for ensuring that Franchise Seller Disclosure Forms are on file with our office for any franchise sellers, including those previously considered franchise brokers.

Large Franchisor Exemptions (between $5 and $15 million): We are implementing a new procedure for processing these applications. After receipt of a large franchisor exemption, we will complete a cursory review to ensure the application meets the basic requirements. If the application does meet the requirements, it will be granted effective immediately with a notice issued. A substantive review will follow so you may receive comments later. Also, please note that there will be a fee for large franchisor exemption filings of $500 for initial applications and $100 for renewals.

Large Franchisor Exemptions ($15 million and over): Large franchisors with a net worth of $15 million and over will be automatically exempt from registration. Although the large franchiser does not file any documentation with this office, the large franchiser is required to provide pre-sale disclosure via an FDD to each franchise prospect.

Definition of subfranchise: The definition of "subfranchise" has been modified to no longer include those who only provide services to franchisees. The definition continues to include those who "sell or negotiate" the sale of franchises.

For more information contact:
Franchise Bureau
217-782-4465 (TTY: 1-877-844-5461)
You will need Adobe® Reader®to view and download the following PDF documents:

Rules under the Franchise Act

Illinois Franchise Disclosure Act

NASAA 2008 Franchise Registration and Disclosure Guide PDF Document

NASAA Commentary on 2008 Franchise Registration and Disclosure Guidelines PDF Document

NASAA Franchise Fact Sheet for Investors PDF Document

Franchise Complaint Form PDF Document

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