With the 2026 franchise renewal season upon us, franchisors will face several important changes this year — from new state filing requirements and increased examiner scrutiny to updated NASAA guidance and federal program revisions. To help franchisors navigate these developments, here are some of the key changes and practical considerations that will ensure a smooth and timely renewal process in 2026.
- Prepare for California’s Significantly Increased Filing Fees — and FRANSES Requirements
California’s July 1, 2025 fee changes will noticeably impact the 2026 renewal season. The Department of Financial Protection and Innovation (“DFPI”) increased fees across most filing categories, making early planning and accurate, complete submissions especially important. The updated fee schedule now includes:
- Initial registration: $1,865 (up from $675)
- Renewal: $1,245 (up from $450)
- Initial Notice of Exemption: $1,245 (up from $450)
- Consecutive Subsequent Notices: $415 (up from $150)
- Notice of Violation: $1,865 (up from $675)
Because the DFPI will not begin substantive review of submitted filings until the correct fee is paid, any discrepancy may delay approval.
In 2025, California transitioned all franchise filings to its new FRANSES electronic platform, replacing NASAA’s EFD. Since creating or updating a FRANSES account may take up to five business days, franchisors should complete setup early. In addition, FRANSES requires all uploaded documents, including franchise disclosure documents (FDDs), agreements, financials statements, exhibits, and signed documents, to comply with digital accessibility standards, effectively requiring ADA‑compliant, text‑based (searchable) PDFs with proper tagging and accessible electronic signatures. Filings that do not meet these requirements may be rejected or require correction before the state will review the filing.
- Expect Continued Scrutiny of Item 5 and Item 6 Fees
States have continued, and in many cases intensified, their scrutiny of Items 5 and 6, with particular attention to whether franchisors are fully, properly, and accurately disclosing every fee a franchisee may be required to pay. Examiners in Washington and California have made clear that franchisors cannot impose new or additional fees through operations manuals, updated policies, technology requirements, or other post‑sale documents unless those fees were clearly disclosed pre‑sale in the FDD. Examiners are also challenging open‑ended language that allows franchisors to raise fees “in their discretion” without a formula or cap, and are increasingly requiring predictable methodologies, such as CPI‑based adjustments, fixed maximums, or percentage caps, so prospects can understand the potential scope of future costs. Optional or indemnity‑related fees receive more flexibility, but only when they are truly optional and clearly described as such.
Examiners are also focused on consistency across documents, routinely cross‑checking Items 5 and 6 against the franchise agreement, multi‑unit or area development agreements, and supplier arrangements. Comments frequently arise when fees appear in one document but not the FDD, or when supplier‑related charges constitute fees paid “directly or indirectly” to the franchisor or its affiliates and are omitted from Item 6. Examiners also expect franchisors to substantiate any fee ranges used, ensuring they reflect reasonable methodologies grounded in actual system experience. Given these trends, franchisors should reconcile Items 5 and 6 with all related documents each year and implement controls to prevent new or modified fees from being introduced outside the FDD, reducing comment risk and strengthening compliance as examiner scrutiny continues to grow across registration states.
- Update Disclosures to Reflect NASAA’s 2025 Guidance on Costs, Timelines, and Performance
NASAA’s 2025 guidance has prompted state examiners to more closely scrutinize whether franchisors are updating their disclosures to accurately reflect changing market and economic conditions. Under this guidance, franchisors are expected to amend Items 5–7, 11, and 19 whenever material shifts occur that could render existing disclosures misleading, incomplete, or outdated. This includes increases in construction costs, tariffs, fluctuations in supply‑chain pricing, extended development or opening timelines, and changes in performance data that impact the reliability of financial performance representations.
Examiners are no longer satisfied with broad “conditions may vary” disclaimers. Instead, they are looking for evidence that franchisors have actively monitored cost drivers and operational assumptions and have updated their FDDs when those assumptions materially change. For example, if labor shortages, interest‑rate changes, equipment price increases, or delays in permitting have affected the average timeline to open a location, franchisors are expected to revise Items 7 and 11 accordingly. Likewise, if systemwide performance data shifts materially, positively or negatively, franchisors should revisit the basis and presentation of their Item 19 disclosures rather than relying on prior years’ results.
- Reevaluate Post‑Term Non‑Competes and Liquidated Damages
NASAA’s February 2025 advisory encourages franchisors to ensure post‑term non‑competes are narrowly tailored and defensible, reflecting increased examiner and judicial scrutiny of overly broad restrictions. Franchisors should review the scope, geographic area, and duration of these provisions to confirm each is tied to protecting legitimate brand interests rather than imposing default, system‑wide prohibitions. Examiners are also taking a closer look at liquidated damages provisions tied to post‑term conduct, particularly where the amounts appear punitive, disproportionate, or not tied to a reasonable estimate of actual harm. As a result, franchisors should ensure any such clauses are carefully drafted, well‑justified, and consistent with the “reasonableness” framework reflected in NASAA’s guidance.
- Understand Connecticut’s New “Business Opportunity” Trademark Exclusion Form
As of September 30, 2025, franchisors relying on the trademark exclusion under the Connecticut Business Opportunity Investment Act will have an easier way of filing exclusion claims with the state. Franchisors will now file Form CT-BOIA-EX (Business Opportunity Exclusion Claim). The new form streamlines the exclusion claim process and must be submitted electronically via email to the Connecticut Department of Banking. There is no fee for this filing. While intended to be a one‑time filing, a franchisor may be required to refile the form if material changes occur, such as modification to trademarks, ownership or control, or how the franchisor characterization of the offering.
- Comply With SBA Requirements as the Franchise Directory Returns
Although not a renewal-specific issue, the Small Business Administration (SBA) has reinstated its Franchise Directory as of June 1, 2025. For more information on how to be listed or maintain eligibility, see our full blog post here.
Contact the Larkin Hoffman franchise team to discuss how these changes, among others, may affect your 2026 franchise renewal.