UFOC Format Obsolete Beginning on July 1, 2008 at 12:01 a.m.
The Uniform Franchise Offering Circular (UFOC) format, in use as an acceptable alternative for Federal Trade Commission (FTC) disclosure compliance since 1994, will become obsolete on July 1, 2008. At that time, franchisors may only use the new Franchise Disclosure Document (FDD) format to comply with the amended FTC Rule. … Read
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Beware of Illegal Pyramid Schemes
Business opportunities are offered in various formats. One is the Multilevel Marketing (“MLM”) business model. Many legitimate companies in the MLM industry lawfully charge low fees to distributors for the right to sell the company’s products, offer refunds on resalable inventory and their distributors actually derive income from the retail sale of products to end-users. However, some illegitimate companies operate pyramid schemes in which… Read
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So What Do I Need To Do With This Disclosure Document?
It is very important that you actually read the franchise disclosure document to learn those things which the franchisor is disclosing to you, and to inform yourself as to the issues discussed in it. … Read
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Be Careful When Relying Upon a Franchisor’s Financial Performance Claims
Prospective franchisees have often been incorrectly told that federal law prohibits a franchisor from disclosing financial performance information to the prospect prior to his or her becoming a member of the franchise system. The newly revised Federal Trade Commission Franchise Rule now requires … Read
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FTC Announces Proposed Biz. Op. Rule
The Federal Trade Commission ("FTC") has announced its proposed "Business Opportunity Rule", 16 C.F. R. Part 437, which will create regulations for the offering for sale of business opportunities separate from those controlling the offering for sale of franchises. The text of the FTC's Revised Notice of Proposed Rulemaking can be found at http://www.ftc.gov/os/2008/03/R511993business.pdf… Read
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Federal Trade Commission Announces Rule Changes
The Federal Trade Commission ("FTC") announced amendments to its so called Franchise Rule, 16 C.F. R. Part 436, with a phase-in period of one year beginning on July 1, 2007. … Read
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Electronic Data Discovery Impacts Small Businesses Threatened With Litigation
Business data used to be recorded upon paper and filed in manila folders within a cabinet. Not anymore! Most businesses have taken advantage of the computer age to go "paperless". Without realizing it, many businesses have electronic data stored throughout their offices. … Read
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The “Standard” Agreement
Franchisors, like the one you may be currently considering, generally provide franchise documents which are very one-sided in their favor. Often, the impression is given that the document package is standard, and no variations can occur.… Read
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Franchising to Become Easier
Recent announced changes in the process of complying with various federal and state franchise offering disclosure and registration requirements mean franchisors are able to take advantage of more streamlined processes in registering and marketing their system. … Read
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An Ounce of Prevention......
Franchised businesses and other business opportunities have become a major portion of the retail business environment in America. Contact us to ask for one of our free checklists of things to consider before purchasing a franchise or business opportunity, and things to do before offering a franchise or business opportunity for sale.… Read
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