The Uniform Franchise Offering Circular
provides background information in over 20 categories as well as a copy of the proposed franchise agreement.
An original, firm-level data set is taken from Federal Trade Commission (FTC)-required Uniform Franchise Offering Circulars
(UFOC).(1) In addition, data are obtained from Bond's 1989 The Source Book of Franchise Opportunities.
A detailed development cost table based on Uniform Franchise Offering Circulars
(UFOC) from 20 hotel companies is presented as well.
Effective July 1, all franchisors were to have implemented the new franchise disclosure format prescribed by the Federal Trade Commission's recently-amended Franchise Rule or "New Franchise Rule." It closely tracks the Uniform Franchise Offering Circular
format created by the North American Securities Administrators Association, but contains new amendment and updating requirements, as well as other significant changes.
Careful investigation prior to purchasing a franchise also necessitates understanding the Uniform Franchise Offering Circular
, which provides a significant amount of information on that given company.
After reviewing a mountain of materials, including the company's Uniform Franchise Offering Circular
(UFOC), a disclosure document that spells out all aspects of the investment opportunity, and interviewing a number of OpenWorks franchisees, the Harrisons put down $6,000 in personal savings toward the initial franchise fee of $11,500 in January 1999 and began operating out of their home in Rancho Cucamonga, California.
These responses included celebration of the FTC's modernization of the 28-year old disclosure law, apathy about a process that to some appeared never-ending, concern about how franchisors would change their franchise-document preparation and sales-compliance procedures after 15 years of relative certainty, dating from 1993, the last update of the "Uniform Franchise Offering Circular
As the disclosure document must be in the format and using the headings set out in Annexure 1 to the code, a foreign franchisor's Uniform Franchise Offering Circular
or other foreign disclosure document will not suffice.
Don't forget to obtain a copy of the franchisor's disclosure document (also called a Uniform Franchise Offering Circular
) and get a copy of the Federal Trade Commission's Consumer Guide to Buying a Franchise.
Even if properly filed with registration states prior to July 1, Uniform Franchise Offering Circular
Guidelines-formatted documents will not be in compliance with the law after midnight, July 1, and cannot be used.
Make sure you review the company's Uniform Franchise Offering Circular
(UFOC), a sort of disclosure statement for potential franchisees outlining all aspects of the investment opportunity.
The best source of information is the company's disclosure document, often referred to as the Uniform Franchise Offering Circular