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Representative Nicholas backs bill to add franchise question to state filings
Summary
A sponsor told the Senate Finance Committee that bill 733 would require businesses filing with the Secretary of State to indicate whether they are part of a franchise and, if so, name their franchisor, in order to build a registry before pursuing regulation of franchise non‑compete practices.
Representative Nicholas asked the Senate Finance Committee on April 1 to approve a narrow change to business filings that would require a checkbox identifying franchise relationships and a text field naming the franchisor.
The bill, numbered 733, was pared back from broader franchise regulation to a single data‑collection question so the state can “start to build a database of businesses we know were franchises,” Nicholas said, explaining the measure grew out of House Commerce inquiries into non‑compete clauses affecting franchise owners. "We really don't know what businesses are franchises," he said, and the committee needs basic information before considering new regulation.
Bill counsel told the committee the original bill would have regulated franchises in more ways but was intentionally narrowed to avoid premature regulation. The plan is to add a checkbox to the Secretary of State's online filing flow so filers can indicate whether they are a franchisee and type the name of their franchisor. Counsel and members noted the change carries no new fee and imposes no immediate regulatory obligation; it is a data‑gathering first step.
David Ball, director of the Business Services Division at the Secretary of State's office, described implementation logistics and costs. Ball said the office expects to absorb the initial IT work but that building the new step in the workflow will require several months of coding and testing. He estimated it could take about five months of IT work and that, because existing businesses will update their records on an amendment or annual filing schedule, it will likely take six to nine months before the state has a more complete picture of franchise relationships.
Ball said the checkbox would be nested near the end of the filing flow so filers for whom it does not apply can skip it. He told members the office could later expand the same field to gather other voluntary business attributes, such as industry type or ownership characteristics, if the committee directs.
The committee did not vote on the measure during the morning sitting. The chair said she would place the item on for a future vote; a member, identified in the transcript as Matt, said he would not vote that day and might schedule the bill for a vote the next day or by Friday.
If approved, the registry would give state officials data needed to assess whether targeted regulation of franchisor–franchisee relationships or franchise‑owner non‑compete clauses is warranted.
