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What is the federal trade commission franchise rule?

It is a federal regulation which requires franchisors to prepare an extensive disclosuredocument and to give a copy to any prospective franchise purchaser before he or she buys afranchise. The disclosure document typically used to comply with the Rule is called aUniform Franchise Offering Circular, or UFOC. Within the UFOC are many different categoriesof information about the franchise, including some of the information described in theresponse to Question 9 above. Required fees, basic investment, bankruptcy and litigationhistory of the company, how long the franchise will be in effect, a financial statement ofthe franchisor, earnings claims (if the company makes them) all are presented in thisdisclosure document. IFA recommends that both your attorney and your accountant reviewthe UFOC and your franchise agreement. For further information from the FTC, or to ordera free publication from the FTC entitled Consumer Guide to Buying a Franchise, call (202)326-2222.
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(FranchiseClique.com)
Updated: Feb 20, 2011
Word count: 149 · Read time: 1 mins
It is a federal regulation which requires franchisors to prepare an extensive disclosuredocument and to give a copy to any prospective franchise purchaser before he or she buys afranchise. The disclosure document typically used to comply with the Rule is called aUniform Franchise Offering Circular, or UFOC. Within the UFOC are many different categoriesof information about the franchise, including some of the information described in theresponse to Question 9 above. Required fees, basic investment, bankruptcy and litigationhistory of the company, how long the franchise will be in effect, a financial statement ofthe franchisor, earnings claims (if the company makes them) all are presented in thisdisclosure document. IFA recommends that both your attorney and your accountant reviewthe UFOC and your franchise agreement. For further information from the FTC, or to ordera free publication from the FTC entitled Consumer Guide to Buying a Franchise, call (202)326-2222.

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