Overview

CR-Fran, or coordinated franchise review, allows a franchisor to register its franchise offering in two or more states at the same time in a procedure that promotes uniformity in the registration and review process. At present, eleven of the twelve states that require presale registration of franchise offerings participate in coordinated franchise review. Only California does not participate in coordinated franchise review. Initial franchise registrations are eligible to participate in coordinated franchise review, so long as the applicant intends to file in two or more of the participating states. Although renewal registrations and amendments of existing registrations are not currently eligible for coordinated franchise review, these registration filings may become eligible in the future.

Coordinated franchise review offers franchisors the option of a more streamlined approach to franchise registration. With coordinated franchise review, the franchisor files its registration application in all of the states in which the franchisor seeks registration by coordination, but the franchisor only needs to respond to comments from a single lead state examiner. The lead state examiner compiles all disclosure comments from the other states and negotiates with the other states to resolve any conflicting or repetitive comments. When the lead state examiner deems a coordinated franchise registration effective, all other participating states agree to make the registration effective. The procedure eliminates conflicting comments between states and results in a thoroughly reviewed disclosure document.

The lead state examiner In a coordinated franchise review evaluates the franchise registration based on the Uniform Franchise Offering Circular ("UFOC") Guidelines. Participating states who wish to make any state specific comments must forward those comments to the lead state examiner, who includes them in the coordinated comment letter.

Finally, coordinated franchise review offers franchisors the certainty of a specific response time. The lead state examiner must provide the initial comment letter, or effective letter, within 30 business days of the filing of a request for coordinated franchise review.

For more information about coordinated franchise review, contact the CR-Fran administrative state coordinator, Dale Cantone, Maryland Securities Division at (410) 576-6368 or dcantone@oag.state.md.us.