Marcia Hultman

Cabinet Secretary

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Division of Insurance - Securities Regulation

Franchise Registration

All franchises must file or be exempt from filing prior to making any offers or sales in South Dakota.

Franchise Law

Franchise Exemptions from Notice Filing

Franchise Renewals

South Dakota Notice Filing Process

Interpretive Opinions

Franchise Law

See South Dakota Codified Law (SDCL) 37-5B.

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Franchise Exemptions from Notice Filing

SDCL 37-5B-12

SDCL 37-5B-13

SDCL 37-5B-14

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Franchise Renewals

Please do not submit a renewal for a franchise more than 30 days prior to the current expiration date. You have until "on or before" the expiration date to renew. The statute SDCL 37-5B-7 does not include the need to file an amendment with the Division of Insurance-Securities Regulation. Franchises filed more than 30 days prior to the renewal date will be returned.

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South Dakota Notice Filing Process

In order to notice file a franchise in South Dakota, franchisors must submit ONE clean copy of the franchise disclosure document (“FDD”) pursuant to 16 Code of Federal Regulations (CFR) Part 436. Securities Regulation requires the FDD to be filed via Franchise Electronic Depository ("FRED") or a flash drive in text-searchable Adobe PDF. There are no other state disclosure requirements. In addition to the FDD, the following must also be submitted:

  1. A notice filing application;
  2. A uniform consent to service of process; and
  3. A fee of two hundred fifty dollars ($250).
  4. Going concern: Please note that pursuant to SDCL 37-5B-5, if the auditor concludes that there is substantial doubt about the franchiser’s ability to continue as a going concern for a reasonable period of time, the director shall be notified by separate letter as to the going concern issue with the notice filing application. There is also a continuing obligation to notify Securities Regulation after a notice filing becomes effective within fifteen (15) days after the auditor concludes there is a going concern.
  5. Notice filing of a franchise is effective upon receipt by Securities Regulation unless comments need to be addressed.
  6. Notice filing expires one year following the date of receipt of the initial application by Securities Regulation. The notice filing requirements for the annual renewal are the same as set forth above except the renewal fee is one hundred and fifty dollars ($150).
  7. Updating disclosure documents. There is no filing required with Securities Regulation for updating disclosure documents; but disclosure information shall be updated as follows:
    1. Any information in the disclosure document shall be current as of the close of the franchiser's most recent fiscal year. After the close of the fiscal year, the franchiser shall, within one hundred twenty (120) days, prepare a revised disclosure document, after which a franchise seller may distribute only the revised document and no other disclosure document;
    2. The franchiser shall, within a reasonable time after the close of each quarter of the fiscal year, prepare revisions to be attached to the disclosure document to reflect any material change to the disclosures included, or required to be included, in the disclosure document. Each prospective franchisee shall receive the disclosure document and the quarterly revisions for the most recent period available at the time of disclosure;
    3. If applicable, the annual update shall include the franchiser's first quarterly update, either by incorporating the quarterly update information into the disclosure document itself or through an addendum;
    4. When furnishing a disclosure document, the franchise seller shall notify the prospective franchisee of any material changes that the seller knows or should have known occurred in the information contained in any financial performance presentation; and
    5. Information that must be audited pursuant to the disclosure requirements need not be audited for quarterly revisions if the franchiser states in immediate conjunction with the information that the information was not audited.

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Interpretive Opinions

Securities Regulation may, upon request and the payment of a fee of fifty dollars ($50), honor requests for interpretive opinions. See SDCL 37-5B-30.

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