DISCLOSURE ITEMS 1-24 Flashcards
(23 cards)
Item 1: (UFOC) This section provides a description of the
company.
The franchisor, its predecessor and affiliate.
Item 2: (UFOC) This section provides biographical and professional information
about the franchisors and its officers, directors and executives.
Business experience.
Item 3: (UFOC) This section provides relevant current and past criminal and civil litigation for the
franchisor and its management.
Litigation.
Item 4: (UFOC) This section provides information about the franchisor and any management
who have gone through a bankruptcy.
Bankruptcy.
Item 5: (UFOC) This section provides information about the initial fees and the range
and factors that determine the amount of the fees.
Initial franchise fee.
Item 6: (UFOC) This item provides a description of all other recurring fees or payments that
must be made.
Other fees.
Item 7: This item is presented in table format and includes all the expendi-
tures required by the franchisee to make to establish the franchise.
Initial investment.
Item 8: This section includes the restrictions
that franchisor has established regarding the source of products or services.
Restriction on sources of products and services.
Item 9: This item provides a reference table that indicates where in the
franchise agreement franchisees can find the obligations they have agreed to.
Franchisee’s obligations.
Item 10: This item describes the terms and conditions of any financing
arrangements offered by the franchisor.
Financing Available.
Item 11: This section describes the services that the franchisor will pro-
vide to the franchisee.
Franchisor’s Obligations/ Assistance and Training Provided
Item 12: This section provides the description of any exclusive territory and whether ter-
ritories will be modified.
Territory.
Item 13: This section provides information about the franchisor’s trademarks, service
marks and trade names.
Trademarks.
Item 14: This section gives information about
how the patents and copyrights can be used by the franchisee.
Patents, copyrights and proprietary information.
Item 15: This sec-
tion describes the obligation of the franchisee to participate in the actual operation of the business.
Obligations to participate in the actual operation of the franchise business/ Franchisee’s Operational Obligations
Item 16: This sections deals with any restrictions
on the goods and services that the franchisee may offer its customers.
Restrictions on what the franchisee may sell.
Item 17: This section tells you when
and whether your franchise can be renewed or terminated and what your rights and restrictions are
when you have disagreements with your franchisor.
Renewal, termination, transfers and dispute resolution.
Item 18: If the franchisor uses public figures (celebrities or public persons), the
amount the person is paid is revealed in this section.
Public Figures.
Item 19: Here the franchisor provides information that a franchisee can use to
estimate what can be earned from the business.
Earnings claims./ Financial Performance Representations
Item 20: This section provides locations and contact information of
existing franchises.
List of franchise outlets.
Item 21: Audited financial statements for the past three years are included
in this section.
Financial statements.
Item 22: This item provides of all the agreements that the franchisee will be required to
sign.
Contracts.
Item 23: Prospective franchisees are required to sign a receipt that they received the UFOC.
Receipt.
