Georgia business opportunities: disclosure, payments and the state filing

A programme and a registered mark are only part of the test

For an offer enabling the purchaser to start a business, section 10-1-410 covers specified device-location promises, buying back the purchaser’s output, or a sales/marketing programme tied to a total initial payment exceeding $500. The location branch concerns the listed vending, display and amusement devices; it is not every kind of help finding customers.

The registered trademark or service-mark exception belongs to the sales/marketing-programme branch. It is not a blanket exception to the other branches. The Act also has specific business and seller exclusions. Calculate the defined initial payment, including the specified first-six-month commitments and total instalment price, before using the $500 comparison.

A seller soliciting or offering in Georgia can fall within the definition, as can a seller with its principal business place there even when soliciting nonresidents. Federal franchise and business-opportunity definitions remain separate.

Sources: Georgia General Assembly / Code Revision Commission: Sections 10-1-410–417, printed 303–322 Georgia General Assembly / Code Revision Commission: Title 10 supplement, contents and entries affecting Part 3 State of Georgia, Governor and General Assembly: Section 10(1), final reenactment/repealer provisions; official enacted-law summary supplies effective date

Give the state disclosure before the first commitment

For a covered business-opportunity sale, give the prescribed written disclosure at least 48 hours before the earlier contract signature or receipt of consideration—money or other value. It needs Georgia’s specified cover and contents, including the actual services and training, a financial statement no older than 13 months updated for material changes, and required earnings information where claims are made.

A Part 436 federal document can replace only the state paragraphs specifically listed in section 10-1-411(c). The separate Georgia cover and the remaining state content still matter. Update the required information for material changes and at least annually. An independently applicable federal disclosure clock is not shortened by the state’s 48 hours.

Sources: Georgia General Assembly / Code Revision Commission: Sections 10-1-410–417, printed 303–322 Georgia General Assembly / Code Revision Commission: Title 10 supplement, contents and entries affecting Part 3 State of Georgia, Governor and General Assembly: Section 10(1), final reenactment/repealer provisions; official enacted-law summary supplies effective date

Do not collect the whole price upfront

In a business-opportunity sale, the seller may collect no more than 15% of the total purchase price. Put the balance in the independent escrow account agreed by both parties. Escrow holds the money separately; release is 60 days after the purchaser starts operating or on complete contractual performance, whichever happens first.

Separately, a promise to refund the price or repurchase supplied items if the purchaser is dissatisfied, under an agreement requiring total initial payment exceeding $500, triggers the stated bond or trust of at least $75,000. The bond must come from an authorised surety; the trust must use a licensed and insured bank or savings institution in Georgia. That subsection excludes deposits from the price paid. Multilevel distribution companies have separate bond and below-$500 exception rules.

Sources: Georgia General Assembly / Code Revision Commission: Sections 10-1-410–417, printed 303–322 Georgia General Assembly / Code Revision Commission: Title 10 supplement, contents and entries affecting Part 3 State of Georgia, Governor and General Assembly: Section 10(1), final reenactment/repealer provisions; official enacted-law summary supplies effective date

The service-of-process filing is not state approval

Section 10-1-416 requires the covered seller with Georgia purchasers/participants, agreements made there or its principal business place there to appoint the Secretary of State to receive legal process and pay the $10 filing fee. This is not approval of the offer or a substitute for ordinary entity filings.

Support income or earnings claims with documented data and supply it to the Attorney General on request. Do not advertise state endorsement or even refer to compliance with this part in the prohibited manner. Written contracts must describe the actual services, payment terms, business address and approximate delivery date.

Sources: Georgia General Assembly / Code Revision Commission: Sections 10-1-410–417, printed 303–322 Georgia General Assembly / Code Revision Commission: Title 10 supplement, contents and entries affecting Part 3 State of Georgia, Governor and General Assembly: Section 10(1), final reenactment/repealer provisions; official enacted-law summary supplies effective date

Keep the seller’s brand authority separate

The Secretary of State distinguishes a business/trade name (often called a DBA) from a trademark or service mark identifying goods or services. Identify which entity owns the actual mark and what permission the U.S. seller has to use and sublicense it.

For example, a Singapore parent’s company name, its U.S. seller’s trading name and the mark on training material can be different records. None substitutes for the licence allowing the actual seller to grant the proposed rights.

The current application instructions say the office does not search federal or other-state registrations and cannot guarantee availability. State acceptance is not a completed assessment of competing U.S. rights.

Sources: Georgia Attorney General Consumer Protection Division: Express source currency statement Georgia Secretary of State: Limits of office search and legal significance Georgia Secretary of State: Trade name versus trademark/service mark

A refund remedy has its own notice and return conditions

Section 10-1-417 provides specified violation-based remedies, including written notice to the seller within one year of the contract for its voiding/refund route. The purchaser must make the goods available for return and cannot be unjustly enriched. A late-delivery complaint or other dispute needs the actual statutory trigger; a refund is not automatic merely because the business disappoints.

The separate multilevel-contract cancellation provisions are not a general cancellation right for every franchise.

Sources: Georgia General Assembly / Code Revision Commission: Sections 10-1-410–417, printed 303–322 Georgia General Assembly / Code Revision Commission: Title 10 supplement, contents and entries affecting Part 3 State of Georgia, Governor and General Assembly: Section 10(1), final reenactment/repealer provisions; official enacted-law summary supplies effective date