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Franchisees Beware: Filing a BOI Report Is Not Optional and Must Be Done Soon

By FileForms | October 8, 2023
Franchisees Beware: Filing a BOI Report Is Not Optional and Must Be Done Soon

Placed in a demanding world, business franchises face a multitude of challenges. From fast food establishments and coffee shops to convenience stores and cleaning services, franchises cover many different industries and business types. Amid the daily concerns of supply chain disruptions, employee retention, and operational costs, franchisees, among many other American businesses, must be aware of a new federal mandate that is of paramount importance: the filing of a Beneficial Ownership Information (BOI) report

This important document, introduced by the federal government, aims to boost commercial transparency by identifying individuals with ownership and control over businesses, including specific franchise operations. Ignoring this mandate can result in hefty fines and possible incarceration.

Understanding Beneficial Ownership

Beneficial ownership refers to individuals or entities that exert control or influence over an entity, even if it’s legally registered under another name. To counteract money laundering and terrorist financing, the U.S. Congress unveiled the Corporate Transparency Act (CTA) on January 1, 2021. As a segment of the Anti-Money Laundering Act of 2020, the CTA requires franchisees and millions of other businesses to disclose their beneficial ownership details to the Financial Crimes Enforcement Network (FinCEN) beginning January 1, 2024.

Filing A BOI Report for Franchisees is Necessary

The BOI report is not an optional filing or another administrative task. It’s a mandate that can have profound implications for business owners, including franchisees. Designed to be a robust shield against illicit activities like money laundering, the BOI report aims to foster transparency and champion legitimate commerce. This transparency is not just about adhering to regulations; it’s about building trust with stakeholders, customers, and the broader community.

Penalties for Franchisees Who Don’t File the BOI Report

The consequences for not filing a BOI report are both extensive and severe. Businesses, like franchises and especially those uninformed, unprepared, or simply distracted by other duties, could face significant penalties that jeopardize their financial stability and livelihood.

Franchisees found in breach could incur maximum fines of $500 per day up to $10,000. Intentional non-compliance or falsification of information could result in criminal charges, with potential imprisonment of up to two years. Beyond the financial and legal penalties, non-compliance can tarnish a business’ reputation, leading to operational damage to the business or complete forfeiture of the franchise.

Don’t Rely on the U.S. Government to Communicate Clearly

Historically, the U.S. Federal Government’s communication strategy regarding new mandates has been marked by its limited outreach. This has led to scenarios where entities, individuals, and even entire sectors were blindsided, resulting in widespread confusion and, occasionally, non-compliance. Past mandates like Medicare Enrollment, the Real ID Act, and Immigration and Visa Deadlines stand as evidence of this pattern.

For businesses, like franchises, seeking guidance on the Beneficial Ownership Information report, the following federal government platforms provide comprehensive information, guidelines, and resources:

Explaining the Corporate Transparency Act (CTA)

The CTA’s inception marked a transformative phase in financial transparency and federal compliance. This pioneering legislation zeroes in on anonymous corporations or vague entities like shell companies. Under the CTA’s rigorous guidelines, franchises, among other businesses, are mandated to furnish disclosures about their beneficial owners to FinCEN. This legislation is not just about compliance; it’s about setting a new standard for transparency in business. 

Reporting company must provide the following information via a BOI report:

  • Legal name
  • Trade names, “doing business as” (d/b/a), or “trading as” (t/a) names
  • Current U.S. street address:
    • Principal place of business for domestic companies
    • U.S. business address for foreign companies
  • Jurisdiction of formation or registration
  • Taxpayer Identification Number

Indicate the type of filing:

  • Initial Report
  • Correction of a prior Report
  • Update to a prior Report

Information required for individual beneficial owners and company applicants:

  • Full legal name
  • Date of birth
  • Current address
  • Unique identifying number and its issuing jurisdiction (e.g., U.S. passport or driver’s license)
  • Image of the document showing the identifying number


  • Obtain a FinCEN identifier to use in future filings as an alternative to the above details
  • Beneficial for frequent filers to streamline the process

How FileForms Assists Franchisees in Remaining Compliant

Given the potential penalties and legal consequences, a passive stance towards filing a BOI report is a blueprint for catastrophe. The proactive, informed, and prepared approach is the best way forward.

FileForms is your complete solution for all franchise-related form and report submissions. We leverage state-of-the-art technology and expert services to ensure every client’s filing and reporting needs are met with precision. We offer invaluable guidance for franchisees required to file a BOI report to FinCEN, guaranteeing compliance with all necessary standards.

Our expertise encompasses:

  • Beneficial Ownership Information report filing
  • Annual Reports
  • Foreign Bank Account Reports
  • Registered Agent services
  • Foreign Account Tax Compliance Act reporting

This strategy not only emphasizes the urgency and significance of accurate filing and reporting but also showcases FileForms’ dedication to offering specialized solutions for franchisees across all models and industries.

As the deadline for the Beneficial Ownership Information report nears, its urgency and significance grows. This document is not a mere formality; it’s a mandate by the U.S. Federal Government. Get started with FileForms today and stay proactive, transparent, and compliant.