Phoenix Arizona Checklist Regarding Matters that must be Disclosed to Prospective Franchisee in Accordance with FTC Franchise and Business Opportunity Rule

State:
Multi-State
City:
Phoenix
Control #:
US-02909BG
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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.

Title: Phoenix, Arizona Franchise Disclosure Checklist in Accordance with FTC Franchise and Business Opportunity Rule Introduction: Franchising in Phoenix, Arizona offers promising opportunities for entrepreneurs looking to establish their business ventures successfully. However, before entering into a franchise agreement, it is crucial for franchisors to disclose necessary information to prospective franchisees. In compliance with the Federal Trade Commission (FTC) Franchise and Business Opportunity Rule, the following checklist outlines the key matters that must be disclosed to a prospective franchisee in Phoenix, Arizona. 1. Franchise Costs: — Initial investment: Clearly state the estimated costs required to establish the franchise, including expenses related to equipment, inventory, leasehold improvements, initial advertising, and training. — Ongoing fees: Detail the ongoing fees, such as royalties, marketing contributions, or other recurring payments, providing the specifics of the calculation and payment schedule. — Additional costs: Disclose any additional costs that a franchisee might incur beyond the initial investment, such as equipment maintenance, insurance, or any future upgrades. 2. Franchise Territory: — Exclusive territory: Specify if a franchisee will have an exclusive territory, ensuring it is defined and clearly understandable. — Competition within territory: Disclose whether other franchisees or company-owned units are already or will be operating within the franchisee's designated territory. — Territory restrictions: Highlight any limitations or restrictions on a franchisee's ability to conduct business outside their designated territory. 3. Franchise Terms and Renewal: — Initial term: Clearly define the length of the initial franchise term, including the start and end dates. — Renewal rights: Disclose any terms outlining the franchisee's right to renew the agreement, along with any conditions, fees, or limitations on renewal. — Termination and defaults: Describe the circumstances under which the franchisor or franchisee may terminate the agreement and any potential consequences of default. 4. Franchisor's Obligations: — Training and support: Outline the extent and nature of the training and ongoing support the franchisor provides, covering pre-opening, operations, marketing, and other key areas. — Advertising and marketing: Specify the franchisee's contribution requirements to national or regional advertising funds, as well as any local advertising obligations. Detail any limitations or control the franchisor has over the franchisee's marketing activities. 5. Financial Performance Representation: — Earnings claims: Indicate whether the franchisor makes earnings claims and disclose the basis and substantiation behind such claims if applicable. — Historical financial data: If available, provide historical financial statements of existing franchisees, including average revenues, operating expenses, and profitability. 6. Franchisee's Obligations: — System standards and operations: Clarify the franchisee's obligations regarding the operations, staffing, quality standards, customer service, and compliance with the franchisor's system. 7. Intellectual Property and Confidentiality: — Trademarks and copyrights: Identify the trademarks, service marks, trade names, logos, and any associated intellectual property rights licensed to the franchisee. — Confidentiality and non-disclosure: Disclose any requirements regarding the protection of the franchisor's trade secrets, confidential information, and proprietary methods. Conclusion: Prospective franchisees in Phoenix, Arizona must receive complete and accurate disclosure regarding various aspects of the franchise opportunity in accordance with the FTC Franchise and Business Opportunity Rule. By following this comprehensive checklist, franchisors can ensure transparency and provide essential information for potential franchisees, allowing them to make informed decisions when considering franchise opportunities in Phoenix, Arizona.

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The Federal Trade Commission enforces a variety of antitrust and consumer protection laws affecting virtually every area of commerce, with some exceptions concerning banks, insurance companies, non-profits, transportation and communications common carriers, air carriers, and some other entities.

But if you're serious about investing in a franchise, there are a few more important things to consider. Understand the business.Consider all the costs.Size up your commitment.Get familiar with a franchise's framework.Be realistic about your expected return on investment.

Here are five things you should consider before turning owning a franchise into a reality. Demand. As is the case before starting any new business, it's imperative that you do your research.Cost.Available opportunities.Training and support.Credibility.

The Business Opportunity Rule requires business opportunity sellers to give prospective buyers specific information to help them evaluate a business opportunity, thus ensuring that the prospective purchasers have the information they need in order to assess the risks of buying a work-at-home program or any other

Objective 1: Identify fraud, deception, and unfair practices that cause the greatest consumer injury. Objective 2: Stop fraud, deception, and unfair practices through law enforcement. Objective 3: Prevent consumer injury through education.

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.

Summary of the 23 Items in a Franchise Disclosure Document 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.

The FTC enforces federal consumer protection laws that prevent fraud, deception and unfair business practices. The Commission also enforces federal antitrust laws that prohibit anticompetitive mergers and other business practices that could lead to higher prices, fewer choices, or less innovation.

Business Guidance Alcohol. Appliances. Automobiles. Clothing and Textiles. Finance. Franchises, Business Opportunities, and Investments. Funerals. Human Resources.

A Franchise Disclosure Document includes 23 specific pieces of information (called items), the franchisors franchise agreement, and various exhibits (like a list of current and past franchisees, and audit financials of the franchisor.

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And a majority of them started with a single store. Franchise opportunity.Franchise and Business Opportunity Rule. Global trade in goods and services is likely to grow in the future. The Future of "Local" — Our Unique Opportunity. DoorDash has always been about helping local businesses succeed, more so than about food delivery. Lorenzen standard applies to stay violation in a corporate case. The debtor sold assets prepetition.

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Phoenix Arizona Checklist Regarding Matters that must be Disclosed to Prospective Franchisee in Accordance with FTC Franchise and Business Opportunity Rule