Key Points

• Fee adjustments. California has significantly increased its franchise registration fees. Franchisors should update budgets and confirm fee disclosures.
• Fast-track renewals. Maryland launched a new fast-track review pilot program for Fiscal Year 2026. To be eligible, Franchisor’s must have a fiscal year ending between December 24 and January 7, Franchisor’s FDD must be registered in the State of Maryland and Franchisor must not be subject to a pending investigation or enforcement matter with the Securities Division.
• CPA Due diligence. Franchise systems should make sure that the CPA that audits their financial statements are qualified to prepare such financial statements.
• FDD Disclosures. Following NASAA guidance on disclosing shifts in market conditions or economic factors, franchisors should amend Franchise Disclosure Documents when costs, timelines or performance materially change. They can’t rely on cautionary language.

The 2026 franchise renewal season is already shaping up to be anything but routine. Evolving state examiner focus, regulatory changes and NASAA updates are altering the playbook for franchisors — impacting how franchise systems disclose, register, market and operate.

Here’s what’s new, why it matters and how your brand can stay compliant and competitive.

Budget for California’s Franchise Filing Fees Increase

As of July 1, 2025, franchise registration related fees have increased.

• Initial registration (Section 31111): $1,865 (up from $675).
• Renewal (Section 31121): $1,245 (up from $450).
• Initial Notice of Exemption (Section 31101): $1,245 (up from $450).
• Consecutive Subsequent Notices: $415 (up from $150).
• Notice of Violation (Section 31303 or 31304): $1,865 (up from $675).

Failure to submit the correct costs can result in registration delays.

Familiarize Yourself with California FRANSES

In 2025, California launched FRANSES, its new electronic filing platform. All franchise filings for the State of California must be submitted using FRANSES (which means a franchisor cannot use NASAA EFD). If you intend to make any filings with California on behalf of franchisors, it is recommended to create an online account with FRANSES, as California can take up to five business days to process new accounts. If you already have a FRANSES account and if you previously submitted electronic filings with California for franchisors, you will want to add the franchisors as organizations under your account for easier filing in the future.

Confirm All Fees Are Properly Disclosed in Item 5 and 6 of the FDD

We expect state examiners to continue focusing on undisclosed fees. In 2025, state examiners actively scrutinized and commented on Item 5 and Item 6 fee descriptions and the right of a franchisor to increase fees. Language granting the franchisor the right to increase fees during the franchise term without clear formulas or maximums (caps) will continue drawing objections. A range that includes a maximum year-over-year percentage increase will be accepted. Additionally, most state examiners do not require caps or formulas on optional fees or fees that are not in exchange for goods or services, for example, indemnification.

Remember to review and reconcile Items 5 and 6 with your franchise agreement and operations manual. Ensure your internal change-control process prevents “manual-driven” fees or pass-throughs that are not expressly pre-disclosed in the Franchise Disclosure Document (FDD). Finally, where ranges are necessary, substantiate your methodology and talk to experienced franchise counsel who can suggest language that provides flexibility, but also withstands regulatory scrutiny.

Anticipate Market Shifts: Align FDD Disclosures with NASAA’s Guidance on Costs, Timelines and Performance

Disclosures made in FDDs reflect market conditions as of the date of preparation. However, fluctuations in prices and disruptions in supply chains may impact these disclosures, including start-up estimates in Item 7 and timelines for opening in Item 11. On August 6, 2025, the NASAA Franchise Project Group released guidance on the impact of shifting market and economic factors on franchise disclosures. In short, if costs, timelines or performance materially change, franchisors must amend the stale or outdated disclosures rather than rely on cautionary language. As market forces evolve, some disclosures may need to be amended to avoid omitting a material fact or making an untrue statement of material fact. We recommend implementing a periodic refresh process for Items 5–7, 11 and 19, timed to your registration cycle and any material system changes. Build internal tracking for development timelines, cost components and unit performance inputs used in estimates and FPRs, and update promptly when a material change occurs. The full NASAA Guidelines is available here.

Ensure All Restrictive Covenants Are Reasonable

In February 2025, NASAA issued an advisory urging reasonableness in post-term non-competes. The advisory emphasizes narrow tailoring across scope, geography and duration, and encourages franchisors to rely on de-identification obligations, trademark and trade secret protections. It also encourages customer non-solicit provisions to protect system goodwill. Courts expect franchisors to demonstrate why the requested scope is no broader than necessary. If you did not do so during the 2024 updating process, then make sure this renewal season to revisit post-term non-compete clauses to ensure they align with the system’s actual competitive footprint, franchisee territory realities and brand protection needs. Also, confirm your de-identification and IP protection provisions are robust and enforceable, especially for digital assets and search practices. The full NASAA Advisory is available here.

Include Washington’s Most Recent Form of Mandatory State Addendum

Washington updated its mandatory state addendum language and has focused on avoiding duplicate initial applications. Use Washington’s most current addendum language verbatim across the FDD and agreement addenda for Washington. A copy of the addendum is available here.

Note Connecticut’s New Form of Business Opportunity Trademark Form

As of September 30, 2025, filers relying on the trademark exclusion of the Connecticut Business Opportunity Investment Act will have an easier way to file. The new form “FORM CT-BOIA-EX” (Business Opportunity Exclusion Claim) will need to be prepared and submitted to Connecticut for filing. This is a one-time filing, but additional filings are required if there is a material change to the information previously submitted. There is no fee for filing this form. Filers can submit the form directly by e-mail to the Department of Banking, and once submitted you will be able to confirm CT’s receipt of the filing by consulting the State’s online e-license system.

Utilize Maryland’s New Fast-Track Program for Eligible FDD Renewals

Maryland launched a new fast-track review pilot program for the 2026 fiscal year. To be eligible, Franchisor’s must have a fiscal year ending between December 24 and January 7, Franchisor’s FDD must be currently registered in the State of Maryland at the time of the filing of the fast-track renewal application and Franchisor must not be subject to a pending investigation or enforcement matter with the Securities Division at the time of the application or during fast-track review. The Guidelines for the Maryland Fast-Track Program and FAQ is available here.

Conduct CPA Due Diligence as State Examiners Take Deeper Dives

As a reminder, franchise systems are expected to conduct due diligence on the CPA used for the audited financial statements submitted as part of the FDD. Steps should be taken to make sure that the CPA used has qualifications to prepare financial statements. Maryland accountants are required to have a peer review by licensing law in Maryland and the examiners have been requesting copies of these peer reviews in certain cases. New York, Hawaii and Maryland in particular have the authority to reject a submission where the peer review is not acceptable or the financials contain errors, inconsistent information or vague footnotes.

Complete SBA Franchisor Certification as Franchise Directory Returns

The SBA reinstated its Franchise Directory as of June 1, 2025, and all franchisors must execute the SBA Franchisor Certification to be listed. The Directory removes the need for SBA addenda and allows lenders to rely on SBA’s listing for eligibility. Brands not in the Directory may be ineligible for new SBA-backed loans. If SBA eligibility matters to your pipeline, complete the SBA Franchisor Certification and submit current agreements and FDD to franchise@sba.gov. Monitor changes to your business model and promptly notify SBA to maintain eligibility.

For more information, please contact Eleanor Gerhards at 215.918.3642 or egerhards@foxrothschild.com, Dharvi Goyal at 215.918.3569 or dgoyal@foxrothschild.com, or another member of Fox Rothschild’s national Franchising & Distribution Practice.