Franchising 002

This is a Franchise Rule wherein it is applies only to sales of franchises sales and not to business opportunity sales

• Time to Deliver Disclosure Document

• No International Application

• Franchises and Business Opportunity Offers

This is a franchise rule that Eliminates the requirement to provide disclosure at the first personal meeting and requires franchisors to provide disclosure at least 14 calendar days before the execution of the franchise agreement

• No International Application

• Time to Deliver Disclosure Document

• Time to Deliver Disclosure Document

• Liability of Third-Party Brokers and Franchisor Employees

This a franchise rule where the Franchisors and brokers are jointly and severally liable for the content of the FOC only if they either directly participated in drafting or were authorized to control the content

• Liability of Third-Party

• Liability of Third-Party

• Time to Deliver Disclosure Document

This is franchise rule that eliminates the contract review period entirely, unless the franchisor has materially altered the terms and conditions of the standard contract attached to the disclosure document and such changes were not requested by the prospective franchisee.

• No International Application

• Time to Deliver Disclosure Document

• Pre-Signing Contract Review Period

This is a franchise rule that must disclose _________by the franchisor to enforce franchise agreements.

• Litigation by Franchisor against Franchisees

• Uniform Franchise Offering Circular (UFOC) Guidelines

• Earnings Claims

If a franchisee signed a contract containing a ________________ in the last 3 fiscal years, the franchisor must provide a statement alerting prospective franchisees to the fact that some franchisees may not be able to speak openly with prospects because of these clauses.

• . Confidentiality Agreements

• Financial Statements of Parent and Sub franchisor

• Audited Financial Statements

The following transactions are exempt from the Franchise Rule exept:

• Petroleum marketer’s

• Fast food chain

• The large franchisee exemption

• The large investment exemption

The franchisor must disclose its audited Financial Statements to the franchisee for the reason of ___________ (more than 1 answer)

• To see if it is profitable

• Financial stability

• Liquidty

• Just for formality only

Q. 

A brokerage is defined as an agreement between 2 or more persons to engage in a business for profit.

• True

• False

Trademark or Tradename Licensing is an exclusive right to distribute products or services within a specified geographical area or demographic segment is not a franchise relationship as long as the owner does not control the method or means of distribution.

• True

• False