A franchise or business opportunity seller must give the prospective buyer a detailed disclosure document at least ten (10) business days before the buyer pays any money or legally commit himself to a purchase. The disclosure document includes:
" Names, addresses, and telephone numbers of at least 10 previous purchasers who live closest to the buyer; " A fully audited financial statement of the seller; " Background and experience of the business's key executives; " Cost of starting and maintaining the business; and " The responsibilities buyer and the seller will have to each other once the buyer has invested in the opportunity.
Franchise sellers also must tell a prospective buyer in writing the number and percentage of owners who have failed.
Philadelphia, Pennsylvania Checklist Regarding Matters that must be Disclosed to Prospective Franchisee in Accordance with FTC Franchise and Business Opportunity Rule The Philadelphia, Pennsylvania Checklist Regarding Matters that must be Disclosed to Prospective Franchisee in Accordance with FTC Franchise and Business Opportunity Rule is an essential tool for franchise businesses looking to comply with the legal requirements set by the Federal Trade Commission (FTC). This checklist ensures that all necessary information is disclosed to potential franchisees, allowing them to make informed decisions about investing in a particular franchise opportunity. The following are some relevant keywords related to this checklist: 1. Franchise Disclosure Document (ADD): The FTC requires franchisors to provide potential franchisees with an ADD, which contains detailed information about the franchise system, costs, fees, obligations, and other relevant aspects of the business opportunity. 2. Philadelphia Franchise Regulations: In addition to the FTC's Franchise and Business Opportunity Rule, Philadelphia, Pennsylvania may have its specific regulations and requirements regarding franchise disclosures that franchisors should also consider. 3. Financial Performance Representations: Franchisors should disclose any past or potential financial performance claims or representations made to prospective franchisees. This includes information about revenues, expenses, profits, and financial projections based on historical data or industry standards. 4. Previous Litigation or Bankruptcy: Franchisors must disclose any litigation or bankruptcy history they have been involved in, as well as any criminal record of the franchise's key personnel. This information ensures transparency and allows potential franchisees to assess potential risks. 5. Franchisee Obligations and Restrictions: Franchisees should be informed about their obligations, restrictions, and requirements when operating the franchised business. This includes details about the franchise agreement, training and support provided by the franchisor, territorial exclusivity, and any limitations on product offerings or suppliers. 6. Marketing and Advertising Fees: Franchisors must disclose any fees or contributions required from franchisees for marketing and advertising purposes. This includes information about national advertising campaigns, local advertising requirements, and associated costs. 7. Trademarks and Intellectual Property: Franchisees need to know the details and limitations related to the use of the franchisor's trademarks, trade secrets, patents, and other intellectual property. Disclosure should include any potential restrictions, renew ability, and protection measures in place. 8. Termination and Renewal: Franchisees should be informed about the conditions for termination or non-renewal of the franchise agreement, as well as any potential rights to renew or purchase additional terms. This includes details about termination fees, notice periods, and any transfer restrictions. It's important for franchisors in Philadelphia, Pennsylvania to adhere to the FTC's Franchise and Business Opportunity Rule while also considering any additional regulations specific to the city. By providing prospective franchisees with comprehensive and transparent disclosures that cover all the mentioned areas, franchisors can foster trust, mitigate risks, and attract potential investors to their franchise opportunities.Philadelphia, Pennsylvania Checklist Regarding Matters that must be Disclosed to Prospective Franchisee in Accordance with FTC Franchise and Business Opportunity Rule The Philadelphia, Pennsylvania Checklist Regarding Matters that must be Disclosed to Prospective Franchisee in Accordance with FTC Franchise and Business Opportunity Rule is an essential tool for franchise businesses looking to comply with the legal requirements set by the Federal Trade Commission (FTC). This checklist ensures that all necessary information is disclosed to potential franchisees, allowing them to make informed decisions about investing in a particular franchise opportunity. The following are some relevant keywords related to this checklist: 1. Franchise Disclosure Document (ADD): The FTC requires franchisors to provide potential franchisees with an ADD, which contains detailed information about the franchise system, costs, fees, obligations, and other relevant aspects of the business opportunity. 2. Philadelphia Franchise Regulations: In addition to the FTC's Franchise and Business Opportunity Rule, Philadelphia, Pennsylvania may have its specific regulations and requirements regarding franchise disclosures that franchisors should also consider. 3. Financial Performance Representations: Franchisors should disclose any past or potential financial performance claims or representations made to prospective franchisees. This includes information about revenues, expenses, profits, and financial projections based on historical data or industry standards. 4. Previous Litigation or Bankruptcy: Franchisors must disclose any litigation or bankruptcy history they have been involved in, as well as any criminal record of the franchise's key personnel. This information ensures transparency and allows potential franchisees to assess potential risks. 5. Franchisee Obligations and Restrictions: Franchisees should be informed about their obligations, restrictions, and requirements when operating the franchised business. This includes details about the franchise agreement, training and support provided by the franchisor, territorial exclusivity, and any limitations on product offerings or suppliers. 6. Marketing and Advertising Fees: Franchisors must disclose any fees or contributions required from franchisees for marketing and advertising purposes. This includes information about national advertising campaigns, local advertising requirements, and associated costs. 7. Trademarks and Intellectual Property: Franchisees need to know the details and limitations related to the use of the franchisor's trademarks, trade secrets, patents, and other intellectual property. Disclosure should include any potential restrictions, renew ability, and protection measures in place. 8. Termination and Renewal: Franchisees should be informed about the conditions for termination or non-renewal of the franchise agreement, as well as any potential rights to renew or purchase additional terms. This includes details about termination fees, notice periods, and any transfer restrictions. It's important for franchisors in Philadelphia, Pennsylvania to adhere to the FTC's Franchise and Business Opportunity Rule while also considering any additional regulations specific to the city. By providing prospective franchisees with comprehensive and transparent disclosures that cover all the mentioned areas, franchisors can foster trust, mitigate risks, and attract potential investors to their franchise opportunities.
Para su conveniencia, debajo del texto en español le brindamos la versión completa de este formulario en inglés. For your convenience, the complete English version of this form is attached below the Spanish version.
