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.
Santa Clara, California is a vibrant city located in the heart of Silicon Valley. Known for its tech industry and proximity to major companies like Apple, Google, and Intel, Santa Clara offers a plethora of business opportunities, including franchise options. If you are considering becoming a franchisee in Santa Clara, it is essential to familiarize yourself with the matters that must be disclosed to you in accordance with the FTC Franchise and Business Opportunity Rule. Here is a detailed checklist of what should be included in the disclosure: 1. Franchisor Information: — Full name, address, and legal structure of the franchisor. — Background information about the franchisor's officers, directors, and key personnel. — Description of any litigation, bankruptcy, or franchise-related legal issues involving the franchisor. 2. Franchise Fee: — Clear explanation of the initial franchise fee and any ongoing fees required by the franchisor (e.g., royalty fees, advertising fees). — Details on any financing assistance or options available for the franchisee. 3. Franchise Territory: — Definition of the exclusive territory granted to the franchisee. — Any restrictions or limitations on expanding or operating outside the given territory. 4. Franchise Obligations: — Comprehensive disclosure of the franchisee's obligations, such as training requirements, equipment or inventory purchases, operational standards, and quality control. 5. Intellectual Property: — Description of the trademarks, trade names, and logos licensed to the franchisee. — Explanation of any restrictions on the use of intellectual property and guidelines for maintaining brand consistency. 6. Financial Performance Representations: — If provided, any information or earnings claims regarding the actual or potential financial performance of the franchise. — Explanation if there are no financial performance representations available. 7. Renewal and Termination: — Terms and conditions for franchise renewal and termination, including any associated costs or penalties. 8. Franchisee's Obligations: — Detailed description of the franchisee's responsibilities, including day-to-day operations, staff hiring and training, marketing, advertising, and customer service. 9. Training and Support: — Overview of initial and ongoing training programs provided by the franchisor. — Description of ongoing support, including marketing assistance, operational guidance, and technological updates. 10. Financial Statements: — Past three years audited financial statements of the franchisor, if available. — Any additional financial information required by the FTC. It is important to note that this checklist is a general outline based on the FTC Franchise and Business Opportunity Rule. However, specific checklists may vary depending on the particular franchise or business opportunity within Santa Clara, California. Therefore, it is crucial to consult the FTC guidelines and seek professional advice to ensure compliance and obtain the necessary information for making an informed franchise investment.Santa Clara, California is a vibrant city located in the heart of Silicon Valley. Known for its tech industry and proximity to major companies like Apple, Google, and Intel, Santa Clara offers a plethora of business opportunities, including franchise options. If you are considering becoming a franchisee in Santa Clara, it is essential to familiarize yourself with the matters that must be disclosed to you in accordance with the FTC Franchise and Business Opportunity Rule. Here is a detailed checklist of what should be included in the disclosure: 1. Franchisor Information: — Full name, address, and legal structure of the franchisor. — Background information about the franchisor's officers, directors, and key personnel. — Description of any litigation, bankruptcy, or franchise-related legal issues involving the franchisor. 2. Franchise Fee: — Clear explanation of the initial franchise fee and any ongoing fees required by the franchisor (e.g., royalty fees, advertising fees). — Details on any financing assistance or options available for the franchisee. 3. Franchise Territory: — Definition of the exclusive territory granted to the franchisee. — Any restrictions or limitations on expanding or operating outside the given territory. 4. Franchise Obligations: — Comprehensive disclosure of the franchisee's obligations, such as training requirements, equipment or inventory purchases, operational standards, and quality control. 5. Intellectual Property: — Description of the trademarks, trade names, and logos licensed to the franchisee. — Explanation of any restrictions on the use of intellectual property and guidelines for maintaining brand consistency. 6. Financial Performance Representations: — If provided, any information or earnings claims regarding the actual or potential financial performance of the franchise. — Explanation if there are no financial performance representations available. 7. Renewal and Termination: — Terms and conditions for franchise renewal and termination, including any associated costs or penalties. 8. Franchisee's Obligations: — Detailed description of the franchisee's responsibilities, including day-to-day operations, staff hiring and training, marketing, advertising, and customer service. 9. Training and Support: — Overview of initial and ongoing training programs provided by the franchisor. — Description of ongoing support, including marketing assistance, operational guidance, and technological updates. 10. Financial Statements: — Past three years audited financial statements of the franchisor, if available. — Any additional financial information required by the FTC. It is important to note that this checklist is a general outline based on the FTC Franchise and Business Opportunity Rule. However, specific checklists may vary depending on the particular franchise or business opportunity within Santa Clara, California. Therefore, it is crucial to consult the FTC guidelines and seek professional advice to ensure compliance and obtain the necessary information for making an informed franchise investment.
