The Uniform Franchise Offering Circular (UFOC) is a comprehensive document every franchisor is required to process and keep current. The FTC requires franchisors to give the UFOC to prospects that want to purchase a franchise from the franchisor.
The purpose of the UFOC is to give the potential franchisee complete background about the franchise. The UFOC includes detailed information on items such as the franchise’s business history, litigation, bankruptcy, initial franchise fee and other fees, total initial investment required, franchisee’s obligations, franchisor’s obligations, financing, territory, trademarks, patents, copyrights, restrictions, dispute resolution, earnings claims, financial statements, contracts, and more.
Once you narrow your list of franchises down to the ones that interest you the most, be sure to carefully read each franchisor’s UFOC as part of your due diligence process. What you find in it is often the case for moving forward with the franchisor, or moving on to another franchise opportunity.
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