Franchising - Did you know?
Did you know that if your company:
- Agrees to license its trademark or other symbol to another business
- Agrees to provide significant assistance in the operation of the other business
- Requires that the other business make a minimum payment of at least $500 during the first six months of operations
Then you have created a franchise relationship? There are both federal and state disclosure requirements applicable to selling franchises. PLG Law can help with your franchising questions.
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1.Treasury Regulation 1.401(a)(9)-3, Q&A 4(a)(2)
2.Treasury Regulation 1.401(a)(9)-3, Q&A 4(a)(1)
3.Treasury Regulation 1.401(a)(9)-4, Q&A 5(b)
4.Treasury Regulation 1.401(a)(9)-8, A-3
5.Private Letter Ruling 200537044
6.Note: Private Letter Rulings from the IRS are opinions of the IRS on the specific facts for which rulings are requested and are not binding precedence upon the IRS.