Franchisee's Obligations Example | Sample Franchise Disclosure Document | Item 9:

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ITEM 9: FRANCHISEE’S OBLIGATIONS

This table lists your principal obligations under the franchise and other agreements. It will help you find more detailed information about your obligations in these agreements and in other items of this disclosure document.

ObligationSection in agreementDisclosure document item
a. Site selection and acquisition/leaseSection 2A of franchise agreementItems 6 and 11
b. Pre-opening purchase/leasesSection 3D of franchise agreementItem 8
c. Site development and other pre-opening requirementsSections 3A and 3B of franchise agreementItems 6, 7, and 11
ObligationSection in agreementDisclosure document item
d. Initial and ongoing trainingSection 5 of franchise agreementItem 11
e. OpeningSection 4 of franchise agreementItem 11
f. FeesSection 6 of franchise agreementItems 5 and 6
g. Compliance with standards and policies/operating manualSection 8A of franchise agreementItem 11
h. Trademarks and proprietary informationSection 7 and 11 of franchise agreementItems 13 and 14
i. Restrictions on products/services offeredSection 12 of franchise agreementItem 16
j. Warranty and customer service requirementsSection 8B of franchise agreementItem 11
k. Territorial development and sales quotasNot Applicable.
l. Ongoing product/service purchasesSection 9 of franchise agreementItem 8
m. Maintenance, appearance, and remodeling requirementsSections 8C and 10 of franchise agreementItem 11
n. InsuranceSection 13A of franchise agreementItems 6 and 8
o. AdvertisingSection 15 of franchise agreementItems 6 and 11
p. IndemnificationSection 13B of franchise agreementItem 6
q. Owner’s participation/management/staffingSections 4, 5, and 14 of franchise agreementItems 11 and 15
r. Records and reportsSection 17A of franchise agreementItem 6
s. Inspections and auditsSection 17B of franchise agreementItem 17
ObligationSection in agreementDisclosure document item
t. TransferSection 18 of franchise agreementItem 17
u. RenewalSection 20 of franchise agreementItem 17
v. Post-termination obligationsSection 22 of franchise agreementItem 17
w. Non-competition covenantsSection 11, 18, and 22C of franchise agreementItem 17
x. Dispute resolutionSection 24 of franchise agreementItem 17
y. Other: Guarantee of franchisee obligations (Note 1)Section 25 of franchise agreement
Notes: (1) Each individual who owns a 5% or greater interest in a franchisee that is a corporation or other business entity must sign an agreement not to compete (Exhibit H) and an agreement assuming and agreeing to discharge all obligations of the “franchisee” under the Franchise Agreement (Exhibit I).

CREDIT: The content of this post has been copied or adopted from the Federal Trade Commission’s Franchise Rule Compliance Guide.