HOUSTON BUSINESS REVIEW

Sound Decisions - What Should I Know About Franchise Rregulations and The UFOC?
By Adrienne Leigh

Adrienne Leigh is the President of FranNet of Houston, a franchise consulting firm that provides coaching to clients who are exploring franchise opportunities. She has over 20 years of experience in franchising and entrepreneurial start-ups. Each week, she will provide comprehensive information on the $1.5 trillion franchise industry.You can reach Addrienne at 713-586-8836 or via email. To learn more about Adrienne Leigh, check out here.

In both the US and Canada, franchise regulations are in place for the benefit of a person considering the purchase of a franchise. FranNet believes our clients must understand these regulations thoroughly in order to make an informed decision.

US federal law, and state law in 14 states, require that a franchise prospect receive a current copy of the 75 - 100 page document known as the Uniform Franchise Offering Circular (UFOC) at the first meeting with a representative of the franchise company. A current copy of the UFOC must be in the possession of the prospect for 14 calendar days before the prospect may sign any commitment or make any deposits. Finally, the franchise contract, with all blanks filled in, must be in the possession of the prospect for five business days before he may sign it. Similar documentation and procedures are required under Canadian law.

Below, you will find the definition of a franchise, according to the US Federal Trade Commission as well as the table of contents for a UFOC. There are a full twenty-three points in total, consolidated here into thirteen.

A franchise is "An agreement for consideration by which a person permits the distribution of goods or services under his trademark, service mark, or trade name, during the term of which the grantor retains control over others or renders significant assistance to others."

1. Contents of the UFOC:
2. Franchisor, predecessors, affiliates and the officers and their business experience
3. Litigation and bankruptcy
4. The estimated initial investment and all fees, including the initial franchise fee, ongoing royalties, advertising fees, site fees, transfer fees, etc. 
5. Restrictions on the sale of products and services and also on their sources
6. Franchisor's obligations and the franchisee's obligations
7. Available financing and territory rights
8. Obligations to participate in the operation of the business
9. Renewal, termination, transfer and dispute resolution
10. Earnings and/or sales claims
11. List of outlets and franchisees, including all who left in the last year, and three years of opened or closed units
12. Audited financial statements of the franchisor
13. Franchise agreement, leases and other documents
14. Receipt of the Circular to be signed by the prospect

Want to know more about franchising but don't know where to start? Here's your chance to meet real franchise experts and ask your questions!
FranNet - The Franchise Connection will be offering a series of free webinars, each featuring a specific franchise opportunity, with valuable insight from an experienced FranNet expert. Login and participate from your office or the comfort of your own home!
FranNet Introduction - "How to Find the Right Franchise" Upcoming Dates

• Wednesday, March 7th - 1:30 PM

• Thursday, March 29th - 7:00 PM

 

To Reserve your spot
Call Adrienne Leigh at 281-213-3337 or
email aleigh@frannet.com
          

 

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Adrienne Leigh

• Sound Decisions - What Should I Know About Franchise Rregulations and The UFOC? (March, Issue No. 1, Thursday Edition)
• Challenges to Finding the Right Franchise For You: Why Looking on the Internet can Actually Steal Your Dream of Business Ownership (January, Issue No. 3, Thursday Edition)
• Making a Sound Decision - What Questions Should You Ask Franchisors? (December, Issue No. 2, Thursday Edition)
• Franchise Selection Decision Plan (December, Issue No. 1, Thursday Edition)
• Solidifying Your Financial Plan (November, Issue No. 5, Thursday Edition)
• Business Preferences Questionnaire (November, Issue No. 4, Thursday Edition)
• YOUR Business Model (November, Issue No. 3, Thursday Edition)
• Framework of a Successful Franchise (November, Issue No. 2, Thursday Edition)
• Can You Do It? Do You Have the Drive? (November, Issue No. 1, Thursday Edition)
• Achieving Your Dream (October, Issue No. 4, Thursday Edition)
• So You’ve Found a Franchise… Now What? (October, Issue No. 3, Thursday Edition)
• Tired of Corporate America? (August, Issue No. 2, Thursday Edition)
• Myths vs Facts when Deciding if Franchising is Right for You – part 2 (May, Issue No. 1, Thursday Edition)
• Myths vs Facts when Deciding if Franchising is Right for You – part 1 (April, Issue No. 3, Thursday Edition)
• How Do You Choose A Franchise Consultant? (April, Issue No. 2, Thursday Edition)
• The Benefits of Owning a Franchise (April, Issue No. 1, Thursday Edition)
• Do You Have What It Takes To Be A Franchisee? (March, Issue No. 5, Thursday Edition)
• Adrienne Leigh – Houston Business Show Advisor on Franchising (March, Issue No. 4, Thursday Edition)