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.
Travis Texas Checklist Regarding Matters that must be Disclosed to Prospective Franchisee in Accordance with FTC Franchise and Business Opportunity Rule serves as a comprehensive guide for franchisors operating in Travis, Texas, to ensure compliance with the Federal Trade Commission's (FTC) Franchise and Business Opportunity Rule. The checklist outlines the mandatory information that franchisors must disclose to prospective franchisees before entering into any franchise agreement, promoting transparency and protecting the interests of both parties involved. Here are some key aspects covered in this checklist: 1. Background Information: — Company Name: The full legal name of the franchisor and any parent company, including DBA's. — Business Experience: Detailed information about the executive team's business and management experience. — Litigation History: Disclosure of any ongoing or concluded litigation involving the franchisor or its key personnel. — Bankruptcy: Disclosure of any past bankruptcies involving the franchisor or its key personnel. 2. Initial Fees and Other Payments: — Franchise Fee: Clear breakdown of the initial franchise fee's amount and payment terms. — Royalties and Advertising Fees: Detailed information on ongoing fees, including royalties and advertising contributions. — Additional Costs: Disclosure of potential expenses such as equipment, inventory, or leasehold improvements. 3. Territory: — Exclusive Territory: Statement clarifying whether the franchisee will have an exclusive territory or face competition from other franchisees or the franchisor. — Territory Restrictions: Any limitations or restrictions on the franchisee's geographic market. 4. Training and Assistance: — Initial Training: Description of the initial training program provided by the franchisor to the franchisee. — Ongoing Support: Disclosures about ongoing training, operational assistance, and marketing support offered by the franchisor. 5. Renewal, Transfer, and Termination: — Renewal Terms: Explanation of the conditions and terms for franchise agreement renewal. — Transfer Terms: Information regarding the franchisee's ability to transfer ownership or sell the franchise. — Termination and Non-Renewal: Clear statement of circumstances leading to termination or non-renewal of the franchise agreement. 6. Financial Performance Representation: — Earnings Claims: Disclosure of any financial performance representations made by the franchisor, including potential sales or profits. 7. Franchise Agreement: — Sample Agreement: Providing a copy of the franchise agreement or relevant excerpts for the franchisee's review. By following this Travis Texas Checklist, franchisors can ensure compliance with the FTC Franchise and Business Opportunity Rule and establish transparent and mutually beneficial relationships with prospective franchisees.Travis Texas Checklist Regarding Matters that must be Disclosed to Prospective Franchisee in Accordance with FTC Franchise and Business Opportunity Rule serves as a comprehensive guide for franchisors operating in Travis, Texas, to ensure compliance with the Federal Trade Commission's (FTC) Franchise and Business Opportunity Rule. The checklist outlines the mandatory information that franchisors must disclose to prospective franchisees before entering into any franchise agreement, promoting transparency and protecting the interests of both parties involved. Here are some key aspects covered in this checklist: 1. Background Information: — Company Name: The full legal name of the franchisor and any parent company, including DBA's. — Business Experience: Detailed information about the executive team's business and management experience. — Litigation History: Disclosure of any ongoing or concluded litigation involving the franchisor or its key personnel. — Bankruptcy: Disclosure of any past bankruptcies involving the franchisor or its key personnel. 2. Initial Fees and Other Payments: — Franchise Fee: Clear breakdown of the initial franchise fee's amount and payment terms. — Royalties and Advertising Fees: Detailed information on ongoing fees, including royalties and advertising contributions. — Additional Costs: Disclosure of potential expenses such as equipment, inventory, or leasehold improvements. 3. Territory: — Exclusive Territory: Statement clarifying whether the franchisee will have an exclusive territory or face competition from other franchisees or the franchisor. — Territory Restrictions: Any limitations or restrictions on the franchisee's geographic market. 4. Training and Assistance: — Initial Training: Description of the initial training program provided by the franchisor to the franchisee. — Ongoing Support: Disclosures about ongoing training, operational assistance, and marketing support offered by the franchisor. 5. Renewal, Transfer, and Termination: — Renewal Terms: Explanation of the conditions and terms for franchise agreement renewal. — Transfer Terms: Information regarding the franchisee's ability to transfer ownership or sell the franchise. — Termination and Non-Renewal: Clear statement of circumstances leading to termination or non-renewal of the franchise agreement. 6. Financial Performance Representation: — Earnings Claims: Disclosure of any financial performance representations made by the franchisor, including potential sales or profits. 7. Franchise Agreement: — Sample Agreement: Providing a copy of the franchise agreement or relevant excerpts for the franchisee's review. By following this Travis Texas Checklist, franchisors can ensure compliance with the FTC Franchise and Business Opportunity Rule and establish transparent and mutually beneficial relationships with prospective franchisees.
