Like this article? PLEASE +1 it! Evan Signature
Evan Carmichael Top Header about About Home Profiles articles Tools forums inspirational quotes About facebook Twitter YouTube Blog

FTC Business Opportunity Rule Disclosure Document Tagged Articles



FTC Interim Business Opportunity Rule Applies to Certain Business Opportunity Sellers
Certain business opportunity sellers are subject to the FTC Interim Business Opportunity Rule 16 C.F.R. Part 437. The FTC Business Opportunity Rule applies to “business opportunity ventures.” A business opportunity venture has 3 elements: 1.The buyer sells goods or services which are supplied by the business opportunity seller or a person affiliated with the business opportunity seller; 2.The business opportunity seller assists the buyer in any way with respect to securing accounts for the buyer, or securing locations or sites for vending machines or rack displays, or providing the services of a person able to do either; and 3.The buyer is required to make a payment of $500 or more to the seller or person affiliated with the business opportunity seller at any time before or within 6 months after the business opens.

Other FTC Business Opportunity Rule Disclosure Document Related Articles

The Uniform Franchise Offering Circular (UFOC)
Franchising has a set of rules, and these rules are manifested in a document called the Uniform Franchise Offering Circular (UFOC). Each prospective franchisee of every franchise company in the U.S. will receive this document as a requirement of the Federal Trade Commission. Effective since 1979, the stated purpose of the FTC rule is: "The Rule is designed to enable potential franchisees to protect themselves before investing by providing them with information essential to an assessment of the potential risks and benefits, to make meaningful comparisons with other investments, and to further investigation of the franchise opportunity." In other words, the UFOC should provide you with enough information to be able to make an informed decision about purchasing the franchise.
Investigating Franchise Offerings
Before investing in any franchise system, be sure to get a copy of the franchiser's disclosure document. Sometimes this document is called a Franchise Offering Circular. Under the FTC's Franchise Rule, you must receive the document at least 10 business days before you are asked to sign any contract or pay any money to the franchiser. You should read the entire disclosure document; make sure you understand all of the provisions. The following outline will help you to understand key provisions of typical disclosure document as well as ask questions about the disclosures. Get a clarification or answer to your concerns before you invest.
FRANCHISE EARNINGS CLAIMS – PART II
Franchise Earnings Information (Part 2) Part 1 of this article discussed how current Ontario and Alberta law makes it difficult to provide franchise prospects with information about how much they can expect to make in any given franchise. In Part 2 of this article, Peter Macrae Dillon discusses the advantages and disadvantages of including earnings information in a franchise disclosure document and how to prepare earnings information for inclusion in a disclosure document. Should we provide earnings information in our disclosure document?
16 Things You Should Know about Ontarios Franchise Legislation
Ontario, Canada's most populous province and economic engine, introduced franchise legislation in 2000. A surprising number of franchise systems are unaware of what they need to do to comply. This article examines what a franchise is, including possible exemptions available. It then discusses how to properly prepare a franchise disclosure document, and how to provide the document to franchise prospects in a way that complies with the law. The ability to rescind for improper disclosure, and to sue for misrepresentation, is also discussed. Finally, the requirement that parties to a franchise agreement deal with each other fairly, in good faith, and in a commercially reasonable way, is discussed. Great read for franchisees and franchisors alike! peter macrae dillon franchise lawyer ontario attorney canada
Government Regulation of Franchises
In the United States, all franchisors must abide by the Federal Trade Commission's (FTC) Franchise Rule, which requires franchisors to prepare a disclosure document called the Uniform Franchise Offering Circular (UFOC ) / Franchise Disclosure Document (FDD) and give a copy of that document to prospective franchisees prior to their purchase of a franchise.
Special Issues for a Subfranchisor
If you want the right to sell franchises on behalf of a franchisor and, perhaps, also operate your own franchises, you may want to become a subfranchisor. A subfranchisor is sometimes called a "master franchisee," particularly in international deals. A subfranchisor steps into the shoes of the franchisor and acts as the franchisor in a given area (for example, state or county). A subfranchisor sells its own franchises and directly enters into a franchise agreement with a franchisee. The franchisor is not a party to the franchise agreement. A subfranchisor is subject to the FTC Franchise Rule and state franchise registration and disclosure laws to the same extent as a franchisor. Therefore, a subfranchisor is obligated to have its own Franchise Disclosure Document.

An Overview of Federal and State Business Opportunity Laws
Business opportunities are regulated under the FTC Business Opportunity Rule (16 C.F.R. Part 437) and by 25 states with business opportunity laws requiring pre-sale disclosure and, in most of these states, registration of the business opportunity offering. While “business opportunities” and “franchises” are somewhat similar because both involve the sale of a product or service to enable a person to start a business, one of the principal differences in the definitions used in the statutes is that there is no license of a trademark or substantial association with a trademark in connection with a business opportunity. Franchisors should be aware of these laws, because they may be a trap for the unwary franchisor, particularly if the franchisor’s principal trademark has no
E-Mailing the Franchise Disclosure Document to Prospective Franchisees
Under the FTC Franchise Rule,a franchisor can deliver the Franchise Disclosure Document (“FDD”) electronically by e-mailing the FDD in a pdf form or mailing a FDD copied on to a CD-ROM to a prospective franchisee. The first personal meeting requirement has been eliminated. The prospective franchisee must have the FDD and Exhibits at least 14 calendar days before the franchisee signs any agreement with the franchisor or gives the franchisor any money. Electronic delivery of the FDD disclosure will save the franchisor substantial time and money as the cost of copying and mailing a Franchise Disclosure Document and Exhibits, let alone personnel cost, really adds up. The FTC estimates that the cost to copy and mail a disclosure document is about $35.00 each. The states having franchise registr
How To Investigate Franchise Offerings
Before investing in any franchise system, be sure to get a copy of the franchiser's disclosure document. Sometimes this document is called a Franchise Offering Circular. Under the FTC's Franchise Rule, you must receive the document at least 10 business days before you are asked to sign any contract or pay any money to the franchiser. You should read the entire disclosure document; make sure you understand all of the provisions. The following outline will help you to understand key provisions of typical disclosure document as well as ask questions about the disclosures. Get a clarification or answer to your concerns before you invest.
FTC New Business Opportunity Rule - Reduced Disclosure But Increased Coverage
Effective March 1, 2012, the FTC’s new Business Opportunity Rule1 becomes effective (the “New Biz Op Rule”). The New Biz Op Rule significantly reduces a business opportunity seller’s disclosure obligation to a prospective purchaser, as the previous format (the FTC Disclosure Statement containing 20 items of required information) has been changed and reduced to a 1-page form requiring 5 items of information that the seller is required to disclose. However, the New Biz Op Rule applies to more companies as, not only business opportunity sellers currently covered by the Interim Biz Op Rule will be subject to the New Biz Op Rule, but also work-at-home programs such a jewelry assembly and envelope stuffing, will meet the expanded definition of a business opportunity.

Featured Article

Bottom Footer



Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!
Name:
Email:
Popular Articles

Five Ways to Show Honest Appreciation

Executive Blind Spots

Work Life Balance: Adding White Space
Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.