The Table of Contents Each disclosure document must contain a table of contents, following the order and form set forth in the amended Rule. When preparing the table of contents, franchisors must state the page where each disclosure item begins and refer to any exhibits by letter. Note that, on this example of a franchise…
Sample Integration Provision This Agreement and all exhibits to this Agreement constitute the entire agreement between the parties and supersede any and all prior negotiations, understandings, representations, and agreements. Nothing in this or in any related agreement, however, is intended to disclaim the representations we made in the franchise disclosure document that we furnished to…
Sample Item 19-1: Financial Performance Representation (Based on Actual Historical Performance Results) ITEM 19: FINANCIAL PERFORMANCE REPRESENTATION The FTC’s Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in…
A company selling securities to residents of the state of Minnesota must comply with federal and state securities laws. State securities laws are collectively and individually referred to as “Blue Sky Laws.” These Blue Sky Laws vary among the states, sometimes to a significant degree. It is important to note that the Minnesota Legislature recently…
Sample Item 21-1: Financial Statements ITEM 21: FINANCIAL STATEMENTS Attached to this disclosure document as Exhibit J are our audited, fiscal year end financials for 2005, 2006, and 2007. Attached to this disclosure document as Exhibit K are the audited, fiscal year end financials for 2005, 2006, and 2007 of subfranchisor Richard McDonald. Sample Item…
Table of Contents Item Page 1. The Franchisor and any Parents, Predecessors, and Affiliates 1 2. Business Experience 3 3. Litigation 4 4. Bankruptcy 6 5. Initial Fees 7 6. Other Fees 10 7. Estimated Initial Investment 11 8. Restrictions on Sources of Products and Services 12 9. Franchisee’s Obligations 15 10. Financing 17 20….
ITEM 7: YOUR ESTIMATED INITIAL INVESTMENT (Column 1)Type ofexpenditure (Column 2)Amount (Column 3)Method ofpayment (Column 4)When due (Column 5)To whom paymentis to be made Initial franchise fee $15,000 (note 1) Lump sum At signing offranchiseagreement Belmont Mufflers,Inc. Travel and livingexpenses whiletraining $2,500 to $5,000 As incurred During training Airlines, hotels, andrestaurants Real estate andimprovements (Note…
ITEM 6: OTHER FEES (Column 1) Type of fee (Column 2) Amount (Column 3) Due Date (Column 4) Remarks Advertising (note 1) 2% of total gross sales. Same as royalty fee Cooperative Advertising (note 1) Maximum – 2% of total gross sales Established by franchisees Franchisee may form an advertising cooperative and establish local advertising…
Introduction The Amended Franchise Rule specifies how franchise disclosure documents are to be prepared, what additional information may and may not be included, and what records franchisors must maintain. Disclosure documents must: use “plain English”; be contained within a single document; and address each disclosure item without including additional information. It is recommended that an…
ITEM 18: PUBLIC FIGURES Belmont has paid Ralph Doister $50,000 for the right to use his name in promoting the sale of our franchise. This right expires on December 31, 2008. Belmont has produced newspaper ads, a brochure, and a video which feature Mr. Doister. Mr. Doister does not manage or own an interest in…
Corporations A corporation is an entity where the interest is held by shareholders and whose business is conducted by a board of directors. The shareholders have limited liability, and can normally transfer their interest freely without affecting the existence of the entity. Corporations are normally subject to double taxation; that is, the profits of the…
“Limited Liability” means that an investor will not be automatically held personally liable for acts of the business, including those acts of other investors, beyond the amount of the individual’s investment. This is important, because it protects your personal assets from creditors. Having limited liability, however, does not give someone a blanket protection from any…
This post helps explain how Minnesota sales and use tax applies to sales of photography, and to purchases made by photographers. These guidelines also apply to video production. This post is intended to help you become more familiar with Minnesota tax laws and your rights and responsibilities under the laws. This is based on Minnesota…
This post is part of a series of posts on Minnesota’s Public and Private Nuisance Laws. Separate from public nuisance but sometimes overlapping it, Minnesota statutes also recognize private nuisance. Private nuisance is a form of damage caused by wrongful conduct. The wrongful activity may consist of a statute or ordinance violation, or it may…
This post is part of a series of posts on Minnesota’s Public and Private Nuisance Laws. General Ordinances and Regulation Most local units of government have the authority to define and abate nuisances by means of local ordinance. In the case of home rule charter cities, this authority may be derived from the city charter….
This post is part of a series of posts on Minnesota’s Public and Private Nuisance Laws. State Public Nuisance Law The key element of Minnesota’s statutory public nuisance law is a civil process through which the creation or continuation of common public nuisance activities can be prevented. This process is described below. The law also…
This and the next several posts describe Minnesota laws that provide remedies to combat offensive or injurious conditions or activities that are a “nuisance” to the surrounding community. A condition or activity may be either a “public nuisance” or a “private nuisance” depending on the scope of the problems caused by the nuisance and on…
Minnesota prohibits most ownership of farmland by individuals who are not U.S. citizens. The legislature has wrestled with this issue numerous times; in its 153- year history, the legislature has made several dramatic reversals of previous land ownership policies. This information brief provides background information on Minnesota’s laws limiting farmland ownership by aliens and identifies…
Distribution of Returns with Proprietor or Pass-through Income or Loss Percent with Sole Proprietor income or loss Percent with S corporation/partnership income or loss No liability 20.3% 5.1% 5.35 percent bracket 15.5 4.0 7.05 percent bracket 15.3 7.5 7.85 percent bracket 20.1 31.0 All filers 16.5 7.6 9.25 percent bracket ($250,000) 23.6 48.7 9.0 percent…
S Corporation, Two Shareholders, Distributes B to Shareholders Taxpayers B1 and B2 formed an S corporation, using $100,000 of money they saved to start a business. B1 contributed 75 percent of the money, $75,000, and owns 75 of the 100 shares of stock. Taxpayer B2 contributed $25,000, and owns 25 of the 100 shares of…
This post is part of a series of posts on the tax implications of different business entity types. Tax Treatment of Different Types of Business Entities or Forms Feature C Corporation S Corporation Partnership* Proprietorship Entity level tax (i.e., two levels of taxation, both to entity and individual owner?) Yes – income taxed to entity…
In brief, this data show for tax year 2007 that filers with business income are distributed widely across the entire income distribution, but that business income, particularly from pass-through sources, is concentrated on top bracket returns: Business income contributed about 11.3 percent of Minnesota individual income tax revenues. About 16 percent of all Minnesota filers…
Proprietor and pass-through entities are often used as a proxy for “small businesses” but tax data reveal many of them are not small. Table 3 lists the number of business filing tax returns by organizational form. Most business owners—72 percent nationally and 66 percent in Minnesota—report their income as proprietors rather than bothering to form…
Executive Summary Owners of a small business can elect to operate in several different forms. They can organize and operate for tax purposes as one of the following: Corporation (C or S corporation) Partnership (general, limited, or limited liability partnership) Limited liability company (LLC) Proprietorship (no explicit form of organization) In general, “pass-through” taxation provides…
This is part of a series of posts on the tax implications of different business entity types. Types of Business Entities and Tax Implications Various factors affect the choice of the form of business organization. Business owners can choose among several different forms of organization with different tax and other legal consequences to each of…
Recent debates in the Minnesota Legislature on individual income tax proposals have focused on their impact on and implications for businesses that are taxed under the individual income tax. Most businesses are organized as sole proprietorships, partnerships, subchapter S corporations or limited liability companies (LLCs), and pay tax on their business income under the individual…
Collect tax debts first, then collect other agency debts in the order they were referred to the Department for collection. The Minnesota Department of Revenue’s wage levy for any type of debt takes precedence over a private garnishment after 70 days from service of the private garnishment to the employer. It does not take precedence…
There are several things that you can do to facilitate the audit process should your business be selected for audit: Use accounting software (Quickbooks, Peachtree, etc) to keep your accounting records Keep your books and records up to date Retain copies of: Bank statements and cancelled checks/deposit slips Credit cards statements and the supporting receipts…
Who must register for MinnesotaCare taxes Hospitals, health-care providers and surgical centers You must register to file MinnesotaCare taxes if you are: a self-employed licensed or registered health-care provider, an employer of a licensed or registered health-care provider, eligible to receive reimbursement from Medical Assistance for the health-care services you provide, a seller of prescription…
Click here for more Minnesota business registration information. Due dates to file annual Minnesota tax returns Form M1, Individual Income Tax Due April 15 or the 15th day of the fourth month after the end of tax year Sole proprietors report income on their individual income tax return Form M8, S Corporation Return Due the 15th…