Oregon regulates franchises by requiring franchisors to provide a Federal Trade Commission disclosure statement to prospective franchisee buyers before a sale is completed. The statement outlines information to help a prospective franchisee make an informed purchasing decision, including:
- The franchisor’s background
- Any legal or financial issues, such as a bankruptcy
- Initial and ongoing costs
- Advertising and training
Under Oregon law, the franchisor must provide the disclosure to the prospective franchisee at least 14 days before they are asked to sign a contract or pay any money.
The franchisor also must maintain a complete set of books, records, and franchise sale details including the distribution of the sale proceeds. See ORS 650.010.
The Oregon law on franchises is codified in ORS Chapter 650. The rules governing franchises are contained in OAR Chapter 441, Div. 325.
Unlike some states, Oregon does not require franchisors to file franchise documents and gain approval before a franchise sale, and does not maintain franchise records on specific businesses.
Both Washington and California register franchises and may have information about a specific franchise.
Washington Department of Financial Institutions
P.O. Box 41200
Olympia, WA 98504-1200
California Department of Business Oversight
1515 K St., Suite 200
Sacramento, CA 95814-4052
Because we require a disclosure statement for the franchisee, we will investigate allegations if a franchisor has made a materially untruthful statement or failed to disclose a material fact in the statement. Complete and submit the division’s complaint form.
If you have an issue with the franchise agreement, or you believe the franchisor has breached the agreement, you should consult an attorney familiar with franchises and business contracts. If you need help locating an attorney, contact the Oregon State Bar Lawyer Referral Service at 503-684-3763 (Portland area) or 800-452-7636 (toll-free).
Oregon law does provide a private right of action or civil remedy for franchisees who have a claim against a franchisor. See ORS 650.020.