Sample Franchise Disclosure Document – Item 13: Trademarks Example

Sample Franchise Disclosure Document – Item 13: Trademarks Example

ITEM 13: TRADEMARKS We grant you the right to operate a shop under the name “Belmont Muffler Shop.” You may also use our other current or future trademarks to operate your shop. By “trademark,” we mean trade names, trademarks, service marks, and logos used to identify your shop. W e registered the trademark on the…

Sample Franchise Disclosure Document – Item 18: Public Figures Example

Sample Franchise Disclosure Document – Item 18: Public Figures Example

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…

Sample Franchise Disclosure Document – Item 2: Table of Contents Example

Sample Franchise Disclosure Document – Item 2: Table of Contents Example

ITEM 2: BUSINESS EXPERIENCE President and Director: Jane J. Doe Ms. Doe became President of Belmont Mufflers, Inc., in June 2006. From May 2004 until June 2006, she served as our Vice President. From June 2000 until April 2004, Ms. Doe was Vice President of Atlas, Inc., a Houston, Texas, manufacturer of automobile wheels. Vice…

Sample Item 8: Restrictions on Sources of Products and Services

Sample Item 8: Restrictions on Sources of Products and Services

ITEM 8: RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES Required purchases You must purchase your pipe bending machine, hoist, cutting torch, mufflers, exhaust pipe, and other supplies under specifications in the operations manual. These specifications include standards for delivery, performance, design, and appearance. Our specifications are formulated by our engineering department and may be modified…

Sample Franchise Disclosure Document – Item 22: Contracts Example

Sample Franchise Disclosure Document – Item 22: Contracts Example

Sample Item 22: Contracts ITEM 22: CONTRACTS The following agreements and other required exhibits are attached to this disclosure document in the pages immediately following: A. Belmont Franchise Agreement B. Belmont Lease of Premises C. USA Credit Corp. Equipment Lease D. Belmont Equipment Purchase Note E. Belmont Initial Fee Loan Agreement F. Belmont Operating Manual…

Sample Franchise Disclosure Document – Item 3: Litigation Example

Sample Franchise Disclosure Document – Item 3: Litigation Example

ITEM 3: LITIGATION Pending Actions Blank v. Belmont Mufflers, Inc., No. 06-111 (M.D. Fla. filed August 1, 2007). Five franchisees filed suit against us for breach of contract, alleging that we failed to furnish equipment in the time period stated in our franchise agreement. These franchisees seek damages of $350,000. A trial is scheduled for…

Sample Franchise Disclosure Document – Item 12: Territory

Sample Franchise Disclosure Document – Item 12: Territory

ITEM 12: TERRITORY You will receive an exclusive territory with a minimum population of 50,000 people. You will operate from one location and must receive our permission before relocating. We will not operate stores or grant franchises for a similar or competitive business within your area. You are not restricted from selling Belmont products and…

Sample Franchise Disclosure Document – Item 15: Obligation to Participate in the Actual Operation of the Franchise Business

Sample Franchise Disclosure Document – Item 15: Obligation to Participate in the Actual Operation of the Franchise Business

Sample Item 15-1: Obligation to Participate in the Actual Operation of the Franchise Business ITEM 15: OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS If you are an individual, you must directly supervise the franchised business on its premises. If you are a corporation, a person who owns at least a 1/3…

Estimated Initial Investment Example | Sample Franchise Disclosure Document | Item 7

Estimated Initial Investment Example | Sample Franchise Disclosure Document | Item 7

ITEM 7: YOUR ESTIMATED INITIAL INVESTMENT (Column 1) Type of expenditure (Column 2) Amount (Column 3) Method of payment (Column 4) When due (Column 5) To whom payment is to be made Initial franchise fee $15,000 (note 1) Lump sum At signing of franchise agreement Belmont Mufflers, Inc. Travel and living expenses while training $2,500…

Sample Franchise Disclosure Document – Table of Contents Example

Sample Franchise Disclosure Document – Table of Contents Example

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….

Sample Item 11: Franchisor's Assistance, Advertising, Computer Systems, and Training

Sample Item 11: Franchisor's Assistance, Advertising, Computer Systems, and Training

ITEM 11: FRANCHISOR’S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING Except as listed below, Belmont is not required to provide you with any assistance. Pre-Opening Assistance Before you open your business, Belmont will: Designate your exclusive territory (Franchise Agreement, Paragraph 2). Assist you in selecting a business site (Franchise Agreement, Paragraph 3). You select your business…

Sample Financial Disclosure Document – Item 10: Financing Example

Sample Financial Disclosure Document – Item 10: Financing Example

ITEM 10: FINANCING Item Financed Source of Financing Source of Financing Amount Financed Term (Yrs) Interest Rate Monthly Payment Prepay Penalty Security Required Liability Upon Default Loss of Legal Right on Default Initial Fee Belmont (note 1) $10,000 10 18% $180 None Personal Guarantee Loss of franchise-unpaid loan Waive notice. Confess judgment Land / Constr…

Sample Franchise Disclosure Document Item 20: Outlets and Franchisee Information Example

Sample Franchise Disclosure Document Item 20: Outlets and Franchisee Information Example

Table No. 1 – Systemwide Outlet Summary Table No. 1 of Item 20 presents the total number of all outlets nationwide – both company owned and franchised – operating at the beginning and at the end of each of the franchisor’s last three fiscal years. This chart should include all outlets that are substantially similar…

Sample Franchise Agreement / Disclosure Document Examples

Sample Franchise Agreement / Disclosure Document Examples

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…

Defining a Franchise – The "Significant Control or Assistance" Element

Defining a Franchise – The "Significant Control or Assistance" Element

The “Significant Control or Assistance” Element The amended Rule covers business arrangements where the franchisor “will exert or has the authority to exert a significant degree of control over the franchisee’s method of operation, or provide significant assistance in the franchisee’s method of operation.” When Is Control or Assistance Significant? The more franchisees reasonably rely…

Defining a Franchise – The "Trademark" Element

Defining a Franchise – The "Trademark" Element

The “Trademark” Element A franchise entails the right to operate a business that is “identified or associated with the franchisor’s trademark, or to offer, sell, or distribute goods, services, or commodities that are identified or associated with the franchisor’s trademark.” The term “trademark” is intended to be read broadly to cover not only trademarks, but…

Sample Franchise Disclosure Documents – Item 23: Receipts

Sample Franchise Disclosure Documents – Item 23: Receipts

Sample Item 23: Receipts ITEM 23: RECEIPTS Receipt This disclosure document summarizes certain provisions of the franchise agreement and other information in plain English. Read this disclosure document and all agreements carefully. If Belmont offers you a franchise, it must provide this disclosure document to you 14 calendar days before you sign a binding agreement…

Sample Franchise Disclosure Document Item 14: Patents, Copyrights, and Proprietary Information Example

Sample Franchise Disclosure Document Item 14: Patents, Copyrights, and Proprietary Information Example

Sample Item 14-1: Patents, Copyrights, and Proprietary Information ITEM 14: PATENTS, COPYRIGHTS, AND PROPRIETARY INFORMATION You do not receive the right to use any item covered by a patent or copyright, but you can use the proprietary information in the Belmont Operating Manual. The Operating Manual is described in Item 11. Item 11 also describes…