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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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