08 Sep, 2017

Best Uniform Franchise Offering Circular

Best uniform franchise offering circular This is a document that must be provided by the franchisor to the prospective franchisee at least 10 business days before any agreement of sale is signed and finalized. What is the importance of this document? Well, it is considered a disclosure statement that covers such items as the Franchisor's obligations, the Franchisee's obligations, territory boundaries, and initial and ongoing fees to be paid. All in all, 23 important subsets of information are included in this comprehensive disclosure statement about the franchise that the franchisee is about to invest in. The BUFOC best uniform franchise offering circular is non-negotiable and is written within a consistent or "uniform" set of criteria. Individual states are not afforded the opportunity to change the terms and conditions of a franchise agreement. The only items that have any flexibility are territory location and possibly extreme demographic disadvantages. Since 1995, the Federal Trade Commission (FTC) has required that this document be written in plain English rather than be full of legal terms that the layman cannot understand. The North American Securities Administrators Associations (NASAA) administers and monitors the BUFOC best uniform franchise offering circular. Following is a list of the 23 categories included in the UFOC: • The Franchisor and Any Predecessors • Identity and Business Experience of Persons Associated with Franchisor • Litigation History • Bankruptcy (any franchisees who may have filed) • Listing of the Initial Franchise Fee and Other Initial Payments • Other Fees and Expenses • Statement of Franchisee's Initial Investment • Obligations of Franchisee to Purchase or Lease from Designated Sources • Obligations of Franchisee to Purchase or Lease in Accordance with Specifications or from Authorized Suppliers • Financing Arrangements • Obligations of the Franchisor; Other Supervision, Assistance or Services • Exclusive/Designated Area of Territory • Trademarks, Service Marks, Trade Names, Logotypes and Commercial Symbols, • Patents and Copyrights • Obligations of the Franchisee to Participate in the Actual Operation of the Franchise Business • Restrictions on Goods and Services Offered by Franchisee • Renewal, Termination, Repurchase, Modification and Assignment of the Franchise Agreement and Related Information • Arrangements with Public Figures • Actual, Average, Projected or Forecasted Franchise Sales, Profits or Earnings • Information Regarding Franchises of the Franchisor • Financial Statements • Contracts • Acknowledgement of Receipt by Respective Franchises Upon receipt of the BUFOC best uniform franchise offering circular, it is essential that the franchisee evaluate the entire document before signing into an agreement. Also, it is important to note that although the document is required by law, it has not necessarily been reviewed for accuracy by a legal body. Therefore, it is highly recommended that a franchise attorney assess the document for accuracy.

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