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 experienced franchise attorney drafts or reviews any franchise agreement or disclosure documents.
Sample Franchise Disclosure Document
- Sample Cover Page
- Sample Table of Contents
- Sample Item 1: The Franchisor and Any Parents, Predecessors, and Affiliates
- Sample Item 2: Business Experience
- Sample Item 3: Litigation
- Sample Item 4: Bankruptcy
- Sample Item 5: Initial Fees
- Sample Item 6: Other Fees
- Sample Item 7: Estimated Initial Investment
- Sample Item 8: Restrictions on Sources of Products and Services
- Sample Item 9: Franchisee’s Obligations
- Sample Item 10: Financing
- Sample Item 11: Franchisor’s Assistance, Advertising, Computer Systems, and Training
- Sample Item 12: Territory
- Sample Item 13: Trademarks
- Sample Item 14: Patents, Copyrights, and Proprietary Information
- Sample Item 15: Obligation to Participate in the Actual Operation of the Franchise
- Sample Item 16: Restrictions on What the Franchisee May Sell
- Sample Item 17: Renewal, Termination, Transfer, and Dispute Resolution
- Sample Item 18: Public Figures
- Sample Item 19: Financial Performance Representations
- Sample Item 20: Outlets and Franchisee Information
- Sample Item 21: Financial Statements
- Sample Item 22: Contracts
- Sample Item 23: Receipts
Conclusion
CREDIT: The content of this post has been copied or adopted from the Federal Trade Commission’s Franchise Rule Compliance Guide.
