The ABC Unit Franchise Agreement is written from the perspective of the franchisor, based on the assumption that the franchisor will normally have prepared the initial draft of the franchise agreement which is included in the Offering Circular. The agreement may or may not be subject to negotiation, depending on state law and the current business practices of the franchisor.
Indiana Annotations for Unit Franchise Agreement
Category:
State:
Multi-State
Control #:
US-2-01-2-STP
Format:
Word;
Rich Text
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FAQ
Every FDD must include the following 23 disclosure items: FDD Item 1: The Franchisor and any Parents, Predecessors, and Affiliates. ... FDD Item 2: Business Experience. ... FDD Item 3: Litigation. ... FDD Item 4: Bankruptcy. ... FDD Item 5: Initial Fees. ... FDD Item 6: Other Fees. ... FDD Item 7: Estimated Initial Investment.
How is a Franchise Disclosure Document Structured? Item 1: The Franchisor, and any Parents, Predecessors, and Affiliates. Item 2: Business Experience. Item 3: Litigation. Item 4: Bankruptcy. Item 5: Initial Fees. Item 6: Other Fees. Item 7: Estimated Initial Investment. Item 8: Restrictions on Sources of Products and Services.
Fees and Payments. The disclosure document will provide details to you regarding the requirement and specifics of any franchisee payments to the franchisor. This information must include items such as marketing fees, advertising fees or other financial obligations requiring contributions.
A disclosure statement is a financial document given to a participant in a transaction explaining key information in plain language. Disclosure statements for retirement plans must clearly spell out who contributes to the plan, contribution limits, penalties, and tax status.
Franchise agreements vary between different franchises, but these seven areas should be addressed in every franchise agreement. Use of Trademarks. Location of the Franchise. Term of the Franchise. Franchisee's Fees and Other Payments. Obligations and Duties of the Franchisor. Restriction on Goods and Services Offered.
The franchisor's business background, ethics and any past bankruptcies. Fees and financial arrangements. Any restrictions on how the franchisee can source products and services, or what they are allowed to sell.
At their core, a franchise agreement establishes how the franchisor and franchisee will operate together. It also outlines what duties and responsibilities must be upheld by both sides. However, specific franchise agreement types may work better for one situation over another.
A disclosure document must include information about the number of existing and former franchisees and contact details for them. It is important for potential franchisees to speak to current and former franchisees to help inform their decision about whether to buy a franchise.