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What is a UFOC? If you appear to be a good candidate for the franchise, the franchisor will send you a UFOC, or "Uniform Franchise Offering Circular." This document is required of franchisors by the Federal Trade Commission (FTC) so that certain information can be disclosed to a potential franchisee before a contract can be signed or any payment is made. What Does It Contain? The UFOC is a valuable document for prospective franchisees and should be read carefully. It contains 23 items of information. Standard UFOC Items: 1 The Franchisor, It’s Predecessors And Affiliates 2 Business Experience 3 Litigation 4 Bankruptcy 5 Initial Franchise Fee 6 Other Fees 7 Initial Investment 8 Restrictions On Sources Of Products And Services 9 Franchisee’s Obligations 10 Financing 11 Franchisor’s Obligations 12 Territory 13 Trademarks 14 Patents, Copyrights and Proprietary Information 15 Obligation To Participate In The Actual Operation Of The Franchise Business 16 Restrictions On What The Franchisee May Sell 17 Renewal, Termination, Transfer And Dispute Resolution 18 Public Figures 19 Earnings Claims 20 List Of Outlets 21 Financial Statements 22 Contracts 23 Receipt How Do I Use It? The UFOC is similar to a securities prospectus. It can provide the information you need to evaluate a company or to target potential sales clients. An accredited franchise company, whether publicly traded or privately owned, must provide this disclosure document. The UFOC is most valuable for potential franchisees, potential franchisors, franchisors, investors, financial companies and suppliers to franchisees. What UFOCs Do You Have? |
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