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.
Contra Costa California Checklist Regarding Matters that must be Disclosed to Prospective Franchisee in Accordance with FTC Franchise and Business Opportunity Rule: The Contra Costa California Checklist Regarding Matters that must be Disclosed to Prospective Franchisee in Accordance with FTC Franchise and Business Opportunity Rule aims to ensure that prospective franchisees are provided with complete and accurate information before investing in a franchise opportunity. The checklist contains a comprehensive list of matters that franchisors must disclose to prospective franchisees. These disclosures help franchisees make informed decisions by providing them with essential information about the franchise system, the franchisor's financial condition, and the role and responsibilities of franchisees. Key matters covered in the Contra Costa California Checklist Regarding Matters that must be Disclosed to Prospective Franchisee in Accordance with FTC Franchise and Business Opportunity Rule include: 1. Franchise Fees: The checklist addresses the disclosure of all initial fees, such as the initial franchise fee, ongoing royalty fees, advertising fees, and any other payments required by the franchisor. 2. Franchisor's Financial Statements: Franchisees must receive audited financial statements of the franchisor, including balance sheets, income statements, and cash flow statements. This information allows franchisees to evaluate the financial stability and viability of the franchisor. 3. Initial Investment: The checklist ensures that franchisees are aware of the estimated initial investment required to open and operate the franchise. It includes costs like leasehold improvements, equipment, inventory, and working capital. 4. Franchisee Obligations: Franchisees must be informed of their duties and obligations under the franchise agreement. This includes details about training programs, support services, advertising requirements, and any restrictions on the sale of the franchise. 5. Territory: The checklist addresses the territory rights granted to franchisees. It includes information about the exclusivity of the territory and any limitations or restrictions imposed by the franchisor. 6. Intellectual Property: Franchisees must be informed about the trademarks, copyrights, patents, and proprietary systems used within the franchise system. This ensures that franchisees understand the protection and usage of intellectual property. 7. Litigation History: Franchisors must disclose any past or pending litigation involving the franchisor or its key personnel. This allows franchisees to assess any potential legal risks associated with the franchise opportunity. 8. Franchisee's Rights and Responsibilities: The checklist covers the rights and responsibilities of the franchisee, including termination or renewal terms, transferability of the franchise, and dispute resolution procedures. Different types of Contra Costa California Checklists Regarding Matters that must be Disclosed to Prospective Franchisee in Accordance with FTC Franchise and Business Opportunity Rule may include specific industry-related requirements or additional state-specific information. It is crucial for prospective franchisees to review the specific checklist applicable to their desired franchise opportunity to ensure compliance with all necessary legal disclosures.Contra Costa California Checklist Regarding Matters that must be Disclosed to Prospective Franchisee in Accordance with FTC Franchise and Business Opportunity Rule: The Contra Costa California Checklist Regarding Matters that must be Disclosed to Prospective Franchisee in Accordance with FTC Franchise and Business Opportunity Rule aims to ensure that prospective franchisees are provided with complete and accurate information before investing in a franchise opportunity. The checklist contains a comprehensive list of matters that franchisors must disclose to prospective franchisees. These disclosures help franchisees make informed decisions by providing them with essential information about the franchise system, the franchisor's financial condition, and the role and responsibilities of franchisees. Key matters covered in the Contra Costa California Checklist Regarding Matters that must be Disclosed to Prospective Franchisee in Accordance with FTC Franchise and Business Opportunity Rule include: 1. Franchise Fees: The checklist addresses the disclosure of all initial fees, such as the initial franchise fee, ongoing royalty fees, advertising fees, and any other payments required by the franchisor. 2. Franchisor's Financial Statements: Franchisees must receive audited financial statements of the franchisor, including balance sheets, income statements, and cash flow statements. This information allows franchisees to evaluate the financial stability and viability of the franchisor. 3. Initial Investment: The checklist ensures that franchisees are aware of the estimated initial investment required to open and operate the franchise. It includes costs like leasehold improvements, equipment, inventory, and working capital. 4. Franchisee Obligations: Franchisees must be informed of their duties and obligations under the franchise agreement. This includes details about training programs, support services, advertising requirements, and any restrictions on the sale of the franchise. 5. Territory: The checklist addresses the territory rights granted to franchisees. It includes information about the exclusivity of the territory and any limitations or restrictions imposed by the franchisor. 6. Intellectual Property: Franchisees must be informed about the trademarks, copyrights, patents, and proprietary systems used within the franchise system. This ensures that franchisees understand the protection and usage of intellectual property. 7. Litigation History: Franchisors must disclose any past or pending litigation involving the franchisor or its key personnel. This allows franchisees to assess any potential legal risks associated with the franchise opportunity. 8. Franchisee's Rights and Responsibilities: The checklist covers the rights and responsibilities of the franchisee, including termination or renewal terms, transferability of the franchise, and dispute resolution procedures. Different types of Contra Costa California Checklists Regarding Matters that must be Disclosed to Prospective Franchisee in Accordance with FTC Franchise and Business Opportunity Rule may include specific industry-related requirements or additional state-specific information. It is crucial for prospective franchisees to review the specific checklist applicable to their desired franchise opportunity to ensure compliance with all necessary legal disclosures.
