The Armenian franchise registration requirement and the application form

Abstract

This paper will not suggest creating a Franchise Disclosure Document in Armenia similar to that of the United States. The reason being that the market in Armenia is not as heavily regulated as it is in the US, another reason is that the law in Armenia regarding franchising is not fully developed yet to warrant a heavy regulation of a massive document similar to the FDD. The US has a long history regulating franchising, the Amended Franchise Rule represents the culmination of a 12-year amendment process conducted by the FTC and its staff. This long period of amendment and adjustment is what gave rise to the Franchise Disclosure Document, however, it was also criticized because it only mandates pre-sale disclosure and does not require any type of federal registration or approval. This prompted several US states to impose franchise registration requirements with relevant state agencies as was discussed above. The following chapters will demonstrate why franchise registration is important and why having certain requirements for the franchisor to abide by, is essential for both businesses and the economy overall. The necessary issues and policies will be discussed, proposing content for the creation of the registration forms, and including exhibits that the franchisor must fill and attach to the application form. These suggestions will be based on the NASAA requirements and they will be appropriated to the Armenian setting. The main aim of these documents should be to verify that the parties have negotiated issues of paramount importance, while requiring the franchisor to disclose certain information necessary for the prospective franchisee to make the final decision regarding the franchise purchase.