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.
Bexar Texas Checklist Regarding Matters that must be Disclosed to Prospective Franchisee in Accordance with FTC Franchise and Business Opportunity Rule When considering the purchase of a franchise in Bexar County, Texas, it is essential for prospective franchisees to understand their rights and the information that franchisors are obligated to disclose. The Federal Trade Commission's (FTC) Franchise and Business Opportunity Rule outlines specific matters that must be disclosed to potential franchisees, ensuring transparency and informed decision-making. Here is a detailed description of the Bexar Texas Checklist Regarding Matters that fall under the FTC Franchise and Business Opportunity Rule: 1. Basic Information: — Legal Name: The franchisor must provide its full legal name, as registered with appropriate authorities. — Trademarks: Any registered trademarks associated with the franchise should be disclosed. — Business Experience: The background and experience of the franchisor's key executives and management team should be shared. 2. Litigation History: — Disclosures regarding any ongoing or past litigation involving the franchisor, its affiliates, or key personnel, including any bankruptcies or unresolved legal disputes. 3. Costs and Fees: — Franchise Fee: A detailed breakdown of the initial franchise fee and any ongoing fees that the franchisee will be required to pay. — Initial Investment: An itemized list of all costs and expenses associated with starting and operating the franchise. — Royalties or Continuing Fees: The amount and frequency of ongoing royalty payments or fees required by the franchisor should be clearly disclosed. 4. Territory: — Territory Restrictions: Information about any territorial restrictions, limitations, or exclusivity granted to the franchisee and other nearby franchisees. 5. Training and Support: — Initial Training: A comprehensive description of the training program provided to franchisees, including its duration, location, and associated costs. — Ongoing Support: Disclosure of the continuing support and assistance provided by the franchisor, including marketing, advertising, and operational support. 6. Current and Former Franchisees: — Contact Information: Providing a list of current and former franchisees, along with their contact details, to enable prospective franchisees to conduct due diligence. — Litigation History: Disclosing any litigation involving current or former franchisees, which may impact the overall success and stability of the franchise. 7. Financial Performance Representations: — Any earnings claims made by the franchisor must be supported by documented evidence, such as financial statements or reports. 8. Renewal, Transfer, and Termination: — Renewal Terms: The conditions and procedures for renewing the franchise agreement. — Transfer Rights: Disclosing the franchisee's ability to transfer or sell the franchise to another party. — Termination and Repurchase Policies: The circumstances under which the franchisor may terminate the franchise agreement and any options for repurchasing the franchise. It is important for prospective franchisees in Bexar County, Texas, to review this checklist carefully and ensure that all relevant information has been provided by the franchisor. The FTC Franchise and Business Opportunity Rule aims to protect franchisees by fostering transparency and promoting fair business practices. By fully understanding the disclosed matters, franchisees can make informed decisions and set themselves up for success in the ever-growing franchise industry.Bexar Texas Checklist Regarding Matters that must be Disclosed to Prospective Franchisee in Accordance with FTC Franchise and Business Opportunity Rule When considering the purchase of a franchise in Bexar County, Texas, it is essential for prospective franchisees to understand their rights and the information that franchisors are obligated to disclose. The Federal Trade Commission's (FTC) Franchise and Business Opportunity Rule outlines specific matters that must be disclosed to potential franchisees, ensuring transparency and informed decision-making. Here is a detailed description of the Bexar Texas Checklist Regarding Matters that fall under the FTC Franchise and Business Opportunity Rule: 1. Basic Information: — Legal Name: The franchisor must provide its full legal name, as registered with appropriate authorities. — Trademarks: Any registered trademarks associated with the franchise should be disclosed. — Business Experience: The background and experience of the franchisor's key executives and management team should be shared. 2. Litigation History: — Disclosures regarding any ongoing or past litigation involving the franchisor, its affiliates, or key personnel, including any bankruptcies or unresolved legal disputes. 3. Costs and Fees: — Franchise Fee: A detailed breakdown of the initial franchise fee and any ongoing fees that the franchisee will be required to pay. — Initial Investment: An itemized list of all costs and expenses associated with starting and operating the franchise. — Royalties or Continuing Fees: The amount and frequency of ongoing royalty payments or fees required by the franchisor should be clearly disclosed. 4. Territory: — Territory Restrictions: Information about any territorial restrictions, limitations, or exclusivity granted to the franchisee and other nearby franchisees. 5. Training and Support: — Initial Training: A comprehensive description of the training program provided to franchisees, including its duration, location, and associated costs. — Ongoing Support: Disclosure of the continuing support and assistance provided by the franchisor, including marketing, advertising, and operational support. 6. Current and Former Franchisees: — Contact Information: Providing a list of current and former franchisees, along with their contact details, to enable prospective franchisees to conduct due diligence. — Litigation History: Disclosing any litigation involving current or former franchisees, which may impact the overall success and stability of the franchise. 7. Financial Performance Representations: — Any earnings claims made by the franchisor must be supported by documented evidence, such as financial statements or reports. 8. Renewal, Transfer, and Termination: — Renewal Terms: The conditions and procedures for renewing the franchise agreement. — Transfer Rights: Disclosing the franchisee's ability to transfer or sell the franchise to another party. — Termination and Repurchase Policies: The circumstances under which the franchisor may terminate the franchise agreement and any options for repurchasing the franchise. It is important for prospective franchisees in Bexar County, Texas, to review this checklist carefully and ensure that all relevant information has been provided by the franchisor. The FTC Franchise and Business Opportunity Rule aims to protect franchisees by fostering transparency and promoting fair business practices. By fully understanding the disclosed matters, franchisees can make informed decisions and set themselves up for success in the ever-growing franchise industry.
