The 2026 franchise renewal season confirmed what many franchisors anticipated heading into the year: the regulatory landscape continues to shift, with new legislation expanding franchisee protections, examiners demanding greater precision in Franchise Disclosure Documents (FDDs), and states introducing filing requirements that can delay registration if not addressed proactively. Below is a summary of the key developments franchisors encountered during the 2026 renewal season, and practical steps to ensure compliance going forward.

Virginia Amends Retail Franchising Act

Virginia enacted HB 69/SB 240, which became effective July 1, 2026, and amended the Virginia Retail Franchising Act in two important respects.

Post-Term Non-Compete Ban

First, the amended law makes it unlawful for any person to offer or enter into a franchise agreement that restricts a franchisee’s right to engage in the business of offering, selling, or distributing goods or services at retail after the franchise agreement ends. The prohibition applies broadly, covering restrictions triggered by both termination and expiration of the franchise agreement.

The amended law, however, includes a narrow carve-out: if a franchisee voluntarily sells the franchise at a mutually agreed-upon price, whether to a third party or back to the franchisor, the sales transaction may include a non-compete restricting the selling franchisee from engaging in a competing retail business for a period of no more than two years after the sale. Unless this carve-out applies, franchisors that previously relied on post-term competitive restrictions in Virginia must now evaluate alternative protections.

Virginia Governing Law Requirement

Second, the amended law provides that any franchise contract or agreement offered or entered into on or after July 1, 2026, shall be governed by the laws of Virginia. Franchise agreements already in place before this date are not impacted by the legislation. However, the statute suggests that any extension or amendment of an existing franchise contract or agreement on or after July 1, 2026 could bring the entire contract or agreement within the scope of the new requirements. Franchisors should map out upcoming renewal and amendment timelines for Virginia franchisees and plan accordingly.

At this point, all franchisors desiring to offer and sell franchises in Virginia must have updated their FDDs and franchise contracts and agreements to reflect the amended law, and submitted and received approval of these updated documents through initial, renewal, or amendment filings in Virginia, as applicable.

Read more about changes to Virginia’s franchise laws here.

Utah Modifies Business Opportunity Disclosure Act Requirements

Utah SB 38, effective May 6, 2026, modifies registration and compliance requirements under the Business Opportunity Disclosure Act.

Key changes include: (1) the requirement that registrants must update the Division of Consumer Protection within 30 days of any changes to the registration application; (2) new prohibited practices, including representing that the Division endorses the seller, omitting material facts, or including false or misleading statements; and (3) expanded authority for the Division to deny, suspend, or revoke registrations where filings are incomplete, false, or misleading, or when the seller has violated the chapter, been enjoined, been convicted of fraud-related crimes, or failed to respond to Division inquiries.

Franchisors registered or filing in Utah should review the full text of SB 38 to confirm compliance with all updated requirements, and implement internal controls to ensure changes to their registration application are reported within the 30-day window.

North Dakota Eliminates State-Specific Addendum Requirement

Effective April 1, 2026, North Dakota no longer requires the FDD to include a state-specific addendum. However, franchisors that maintain a financial assurance must now disclose that financial assurance to both the franchisee and the North Dakota Insurance & Securities Department, and must indicate their choice of financial assurance on the cover letter included with the franchise application.

Because the state-specific addendum previously served as the vehicle for this disclosure, franchisors with a financial assurance may find it beneficial to retain the North Dakota Addendum in full or in part within the FDD exhibits, even though it is no longer required.

Minnesota Introduces Worker’s Compensation Insurance and New Addendum Requirements

Minnesota introduced two new requirements during the 2026 renewal season. First, franchisors must provide evidence of workers’ compensation insurance coverage throughout the active registration period. If the business has no employees in Minnesota, a signed and dated letter on business letterhead attesting to that fact must be provided.

Second, Minnesota now requires the inclusion of a state-specific addendum containing prescribed language regarding registration under the Minnesota Franchise Act. This includes statements that registration does not constitute approval, recommendation, or endorsement by the Commissioner of Commerce, and that the Minnesota Franchise Act makes it unlawful to offer or sell any franchise subject to registration without first providing a copy of the public offering statement to the prospective franchisee at least seven days prior to the execution of any binding agreement or payment of consideration. Franchisors filing in Minnesota must ensure this addendum language is incorporated into FDD exhibits.

Hawaii Requires Detailed Fee Disclosures

Consistent with the broader trend of scrutinizing fee disclosures for specificity and completeness, Hawaii’s Securities Compliance Branch has begun requiring more detailed disclosure regarding interest, penalties, and tax allocation in connection with franchisee obligations to reimburse the franchisor for Hawaii general excise tax liability. Examiners have indicated that generic language, such as “other amounts due,” is insufficient, and are requiring instead that disclosures expressly reference interest and penalties, and explain how the tax liability on the reimbursement amounts will be allocated.

Franchisors with operations in Hawaii should review their FDDs and franchise agreement to confirm that all tax-related reimbursement obligations are fully and explicitly disclosed.

Looking Ahead

The 2026 renewal season reinforced that the franchising regulatory environment is growing more complex, and that franchisors must remain attentive to both legislative developments and evolving examiner expectations across all registration states.

Virginia’s post-term non-compete ban is likely the beginning of a broader trend, and franchisors should anticipate similar legislative activity in other jurisdictions in the coming years. At the same time, the procedural changes in Minnesota, the streamlining in North Dakota, and the examiner specificity demanded by Hawaii all underscore the importance of reviewing state-specific requirements annually to avoid filing delays and compliance gaps.

Contact the Larkin Hoffman franchise team to discuss how these developments may affect your franchise system and to ensure your FDDs, franchise contracts and agreements and state-specific filings are positioned for the next renewal cycle.