Last Friday, the Maryland Office of the Attorney General issued an interpretative opinion/no-action position allowing franchisors to file notice of claims of exemption under the Maryland Franchise Registration and Disclosure Law on CD-ROM without including paper copies. The new procedure goes into effect on March 1st. According to the state, "allowing franchisors to file notices of claims of exemption on CD-ROM. . . simplifies the filing procedures for those franchisors, reduces costs and storage requirements for filers and the Securities Division, and saves environmental resources. In addition, these streamlined procedures do not compromise the Securities Division's review or recordkeeping functions and have no impact on prospective franchise investors."

Exemption filers must still file a paper copy of the "Form F" (the Maryland state specific exemption form [PDF]) and thischange does not effect the initial registration, renewals or amendments of franchise registrations. Those filings must still be completed in paper and electronic format.

The interpretative opinion alsoincludes a simple to follow guide on what to include in any exemptionfiling made on or after March 1st:

  1. One paper copy of the Form F-1 required under Maryland lawwith an e-mail address of the person to whom communications regarding the notice of claim of exemption should be directed;
  2. One CD-ROM, in PDF, with: (a) one file with a copy of the franchisor's complete Franchise Disclosure Document, if required; and (b) one additional file with all of the forms and documents required to accompany the claim the exemption, or separate files for each separate form and document included on the CD-ROM; and
  3. A check made payable to "Office of the Attorney General" in the amount of $250.

Other than the Form F-1 and an applicant's cover letter, if an applicant chooses to include a cover letter, no paper documents should be filed as part of a notice of claim of exemption. Those with questions are invited to contact Deputy Securities Commissioner Dale E. Cantone at dcantone@oag.state.md.us.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.