08 Sep, 2017

Uniform Franchise Offering Circular

If you are interested in buying a franchise, you will surely have to get a recent copy of the Uniform Franchise Offering Circular or UFOC. You will need to review it thoroughly. It is only after you have contacted the franchisor or filled out the questionnaires for determining whether you’ll fit the outline of "their type" of franchisee. Then you will get 2 docs in the mail. One of those is the UFOC (comprising twenty items of info on the franchise), while the other one would be the special franchise agreement. State as well as federal laws now require that you - the franchisor provide such docs at least ten days before you take your deposit and sign you on as an accredited franchisee. If you do not receive them, be sure to inquire with the authority. Carefully look at these pieces of info in these docs before you consult with the CPA and attorney. Only because these docs seem to comply thoroughly with the underlying FTC rules and / or diverse state filing requirements does not essentially mean that they do (and that these terms are entirely in your favor). Today, a great majority of these regulations just require that the franchisor makes comprehensive as well as full revelation of different types of information categories required by the law in the doc. As long as this disclosure is undertaken in the right manner, that franchisor surely can draft these terms as well as the terms of the franchise or its obligations to you as the franchisee in virtually any manner it wants. The first and foremost section in the UFOC or Uniform Franchise Offering Circular is actually short account of the franchise. This history must document who has founded your company as well as the time when it started doing its business. Then again, the incorporation dates should be included. You also need to understand when it started initially. This data will allow you to know the type of expertise or experience that the franchisor needs to offer. The franchisor who’s been operating in business for merely a couple of years and started franchising only a year following his start-up does not have loads of experience in this business. The following section will discuss the dynamics franchise fees as well as royalties. However, the fee of the front-end franchise and the royalties are entirely disclosed.