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Uniform Franchise Offering Circular (UFOC) Table of Contents:

Item 1. The Franchisor, Its Predecessors and Affiliates

  • The name of the Franchisor, its predecessors, and affiliates
  • The name under which the Franchisor does or intends to do business
  • The principle business address of the Franchisor, its predecessors and affiliates, and the Franchisor's agent for service of process
  • The business form of the Franchisor (i.e., LLC, corporation, etc.)
  • The Franchisor's business and the franchises to be offered in this state

Item 2. Business Experience

  • Name and position of the directors, trustees ad / or general partners, the principal officers and other executives or sub franchisors (see "Multiple Unit Franchising" in the Resources section) who will have management responsibilities
  • List of the franchise brokers used by the Franchisor
  • Each person's principal occupations and employers during the past five years

Item 3. Litigation

  • Any administrative, criminal, or material civil action pending against the people listed in Item 2

Item 4. Bankruptcy

  • During a 10-year period immediately before the date of the offering UFOC anyone listed in Item 2 that has filed as debtor to start an action under the U.S. Bankruptcy Code
  • Obtained a discharge of its debts under the Bankruptcy Code
  • Was a principle officer of a company or a general partner is a partnership that either filed a petition or obtained a discharge of its debts under the U.S. Bankruptcy Code

Item 5. Initial Franchise Fee

  • All fees and payments for services or goods received from the Franchisor before the franchisee's business opens
  • If the initial fee is not uniform, the formula or the range of initial fees

Item 6. Other Fees

  • Other recurring or isolated fees or payments that the Franchisee must pay to the Franchisor or its affiliates
  • The fees must be disclosed in tabular form
  • The amount must be disclosed in a dollar or percentage
  • The due date for recurring payments
  • Examples are: royalty, lease negotiation, construction, remodeling, additional training, advertising, group advertising , additional assistance, audit, accounting / inventory, and transfer and renewal fees

Item 7. Initial Investment

  • Expenses for starting the business including whom the payments are made, when, whether each payment is refundable, and financing details if appropriate
  • Real property needed
  • Equipment, fixtures, other fixed assets, construction, remodeling, etc.
  • Inventory needed to begin operation
  • Deposits, business licenses and other prepaid expenses
  • Addition funds required by the franchisee
  • These expenses are only estimates; your costs could vary

Item 8. Restrictions On Sources of Products and Services

  • Goods or services that must be purchased or leased from the Franchisor, its designee, or from suppliers approved by the Franchisor
  • The manner in which the Franchisor issues and modifies specifications or approvals to suppliers

Item 9. Franchisee Obligations

  • The principle obligations of the franchisee under the franchise agreement
  • Typically contains a chart that cross references the franchisee's obligations in Items in the UFOC and the franchise agreement

Item 10. Financing

  • Information regarding any financing arrangements offered by the Franchisor
  • A franchisee should compare any terms offered by the Franchisor with those available from other sources

Item 11. Franchisor's Obligations

  • Summary of the Franchisor's contractual obligations
  • Initial training programs
  • Advertising programs
  • Site location and construction
  • Computer hardware and software requirements

Item 12. Territory

  • Any exclusive territory granted to the Franchisee
  • Establishing another franchisee close by who may also use the trademark
  • Establish a company-owned outlet or other channels of distribution and its ability to compete with the Franchisee

Item 13. Trademarks

  • The principal trademarks to be licensed to the Franchisee
  • Whether the marks are federally trademarked
  • Any agreements that significantly limit the rights of the Franchisor to use or license the use of the marks

Item 14. Patents, Copyrights and Proprietary Information

  • Any patents or copyrights that are material to the franchise
  • Any restrictions on the use of patents, copyrights or proprietary information

Item 15. Obligation to Participate In The Actual Operation of the Franchised Business

  • Whether absentee ownership is allowed
  • Requirements on managers such as maintaining trade secrets, non-competition, etc.)

Item 16. Restrictions On What the Franchisee May Sell

  • Restrictions or conditions on the goods or services that the Franchisee may sell

Item 17. Renewal, Termination, Transfer and Dispute Resolution

  • Provisions dealing with termination, renewal, transfer, dispute resolution, and other important aspects of the franchise relationship
  • Items must be presented in tabular form

Item 18. Public Figures

  • Must disclose the use of public figures (celebrities)
  • Compensation
  • Extend to which the celebrities are involved in the actual management of the franchise
  • Total investment of public figures

Item 19. Earnings Claims

  • If a Franchisor chooses to make an earnings claim, the details of the claim will made
  • If a Franchisor choose not to, then it shall include a prescribed negative disclosure
  • An earnings claim shall include a description of its factual basis and the material assumptions underlying its preparation and presentation

Item 20. List of Outlets

  • The number of franchises (both franchisee-owned as well as company-owned) as of the close of each of the Franchisor's last three fiscal years
  • The names of all franchisees and the addresses and telephone numbers of all of their outlets
  • The estimated number of franchises to be sold during the one-year period after the close of the most recent fiscal year
  • Also franchises transferred, canceled or terminated, not renewed, reacquired by the Franchisor, and otherwise ceased to do business
  • Name and last known address and telephone of franchisees that have had an outlet terminated, cancelled, not renewed, or otherwise not doing business

Item 21. Financial Statements

  • The Franchisor's balance sheets for the last two fiscal years
  • The Franchisor's last three years of operations statements, stockholder equity, and cash flows

Item 22. Contracts

  • A copy of the Franchisor's standard franchise agreement

Item 23. Receipt

  • A detachable document acknowledging its receipt by the prospective franchisee

Normal Attachments to the UFOC:

Exhibit A: Financial Statements

Exhibit B: Franchise Agreement and Schedules

Exhibit C: Non-Disclosure and Confidentiality Agreement

Exhibit D: List of Franchisees

Exhibit E: Terminated Franchisees and Franchisees Who Have Sold Their Franchise

Exhibit F: Industry Specific Licenses Required

Exhibit G: State Administrators

Exhibit H: Table of Contents of Operations Manual

Exhibit I: Statement by Prospective Franchisee

Exhibit J: State Appendix

Exhibit K: Receipt Pages

 

 

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