Learn more about franchise UFOC before buying. Franchising system is a contract between two parties, the franchisor and franchisee. As in the case of a contract, there are legal documents and agreements, which must be respected by both parties. The first of these documents is called a UFOC or Uniform Franchise prospectus. In fact, this document is a description of the specific types of information that the franchisor must submit before the agreements were signed.
FTC outlines the first rules of the franchise, requiring minimal disclosure in 1979, originally known as the prospect. Since that time, the format and content continue to evolve to provide stronger and more uniform means of disclosing information about the company from which you may be offering to buy the franchise. There are two persons responsible for the evolution of the UFOC: FTC (Federal Trade Commission), and NASSA (North American Securities Administrators Association). The most commonly used form for the UFOC NASSA comes from and received by the FTC.
There are 15 states that, in addition to the requirement to have a franchise UFOC before selling the franchise, also require that the document was registered with the government. These conditions are known as registration condition.
These conditions include:
- North Dakota
- South Dakota
It is important to understand about the UFOC with & # 39 is that while the document should contain certain essential information, such as franchise fees and additional start-up costs, does not require an audit of the agreement. In other words, the contract should be there but is not guaranteed by any third party, to be exact. In addition, States that have not registered with the government does not require that a copy of the UFOC sent any regulatory body.
UFOC is designed to give you the information needed to make an informed decision about whether or not you would like to enter into business with the franchise. So you can be sure that the information provided in this Agreement will be exactly. If the franchise is clearly distorts the opportunity, there is recourse through the courts. This does not mean that the franchise to make the practice of misrepresenting what they offer, but rather a reminder of the age-old adage, "buyer". If you know that you are looking at you much more likely to make a firm decision.
So what makes a good UFOC really?
UFOC provides many types of information, including information about the company and current officials of the franchise, as well as the disclosure of financial information. The information contained in this document should give you a good overall picture of what the company offers and that you will work, but it also gives you the resources to test yourself. There are 23 areas or objects within the UFOC. One of these elements with the & # 39 is the contact information for the current franchise. Importance UFOC with & # 39 is that it gives you all the information you need to review a franchise but this is not the end of the research the franchise opportunity.
What UFOC contains
UFOC includes information on the franchisor, the company's key employees, and how much experience in managing a franchise they bring to the company, as well as bankruptcy and litigation history. Do you want to know what kind of experience you are buying into.
In addition, it includes all the information about the investments required for this franchise. This includes the initial franchise fees, equipment fees required, commissioning evaluations, as well as any necessary purchases, you & # 39; I will have to do to get started. Suppliers to the fact that you have to do business must be disclosed, as well as how much you are expected to contribute to such things as annual advertising budget and how much it will cost, to create its initial inventory.
UFOC must also contain a legal agreement on trademarks, what products or services may be offered, and any required reports by the franchisee. Duties two franchisors and franchisees will be revealed, as well as the rules governing the transfer, termination and renewal of the franchise agreement are included.
profits claim (that you should be able to earn a) may or may not be included and not from the & # 39 is a must-see destination in the UFOC. If it is on, make sure the company can prove their claims.
There are other agreements that must be resolved between the franchisor and the franchisee. Although some of these agreements are set out in the UFOC, others may vary depending on the specific requirements of the franchise agreement. Such things as protected area often addressed individually. In such cases, any other arrangements that will be necessary, must be attached to the UFOC, including individual franchise agreement in its general form.