By Franchise Law Team - Mohajerian Inc.
A UFOC is a means for franchisor information
to be distributed to potential and existing franchisees. UFOC is
an acronym for Uniform Franchise Offering Circular, and will contain
all feasible information regarding a franchise business.The purpose
of the UFOC is to protect the public by requiring full-disclosure
of pertinent information regarding the franchise business.
The UFOC format of disclosure was approved
by the FTC in 1995. In states where 'registration requirements'
call, the UFOC is the required format for disclosure. These states
currently include: California, Illinois, Indiana, Maryland, Minnesota,
New York, North Dakota, Rhode Island, South Dakota, Virginia, and
Washington. Because the UFOC format has increased stringent requirements
and the FTC or UFOC format is acceptable in 'non-registration states'
- most companies utilize the UFOC format for efficiency.
The UFOC format for disclosure requires
23 categories of information be provided to franchisees regarding
the franchisors business:
- The Franchisors, Its Predecesors, and Affiliates
- Business Experience
- Initial Franchising Fee
- Other Fees
- Initial Investment
- Restrictions on Sources of Products
- Franchisee's Obligations
- Franchisor's Obligations
- Patents, Copyrights, and Proprietary Information
- Obligation(s) to Participate in the Actual Operation
of the Franchise
- Restrictions on What Franchisee May Sell
- Renewal, Termination, Transfer, and Dispute Resolution
- Public Figures
- Earnings Claims
- List of Franchise Outlets
- Financial Statements
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