PLG Law Blog

Franchising - Did you know?

Did you know that if your company:

  1. Agrees to license its trademark or other symbol to another business
  2. Agrees to provide significant assistance in the operation of the other business
  3. 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.

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