| The
Uniform Franchise Offering Circular, or UFOC, is a document
containing detailed information about a franchise. Its
contents are regulated by the Federal Trade Commission
and are designed to assist the prospective franchisee
in analyzing the merits of a potential franchise. By
law, a franchisor must provide the franchisee with a
UFOC before a contract can be signed or any payment
is made. A UFOC is made up of three parts: 23 items
describing various aspects of the franchise offering,
2) up to three years of the franchisor's audited financial
statements, and 3) the franchise agreement that the
franchisee must sign if he/she intends to buy the franchise.
Keep
in mind that neither the FTC nor any of the states has
reviewed the offering circular to determine whether
the information submitted is true or not. They merely
require that the franchisor make representations based
upon a prescribed format. If the information provided
is false, franchisors are subject to civil penalties.
However, it is far less costly to avoid making a mistake
in the first place with solid research of your own.
The
UFOC must contain the following 23 Items:
UFOC
Items |
| Item
1 |
The
Franchisor, Its Predecessors and Affiliates |
| Item
2 |
Business
Experience |
| Item
3 |
Litigation |
| Item
4 |
Bankruptcy |
| Item
5 |
Initial
Franchise Fee |
| Item
6 |
Other
Fees |
| Item
7 |
Initial
Investment |
| Item
8 |
Restrictions
On Sources Of Products |
| Item
9 |
Franchisees'
Obligations |
| Item
10 |
Financing |
| Item
11 |
Franchisor's
Obligations |
| Item
12 |
Territory |
| Item
13 |
Trademarks |
| Item
14 |
Patents,
Copyrights and Proprietary Information |
| Item
15 |
Obligation
to Participate in the Actual Operation of
the Franchise Business |
| Item
16 |
Restrictions
on What the Franchisee May Sell |
| Item
17 |
Renewal,
Termination, Transfer and Dispute Resolution |
| Item
18 |
Public
Figures |
| Item
19 |
Earnings
Claims [available
for purchase] |
| Item
20 |
List
of Outlets [available
for purchase] |
| Item
21 |
Financial
Statements [available
for purchase] |
| Item
22 |
Contracts |
| Item
23 |
Receipt |
|
Browse through our UFOC
Store for a comprehensive and searchable directory
of UFOCs.
|
