What disclosure documents is a franchisor required to provide to a prospective franchisee considering the purchase of a franchise?
A franchisee planning to purchase a franchise is entitled to obtain the franchisor’s current Franchise Disclosure Document which contains: • Written disclosures setting forth the required information concerning the business to be franchised. • Copies of all agreements the franchisee must execute as a condition to entering the franchise system. • The franchisor’s prior three years of audited financial statements and other exhibits necessary to comply with the Franchise Rule and applicable state franchise laws. The franchisee is entitled to receive the disclosure documents at least 14 calendar days before any contract is executed or money changes hands. The day of receipt is not permitted to be counted as one of the 14 days.
Related Questions
- If a new FAQ is issued that would necessitate revision of a franchisor’s Franchise Disclosure Document ("FDD"), when must the franchisor revise its FDD?
- What disclosure documents is a franchisor required to provide to a prospective franchisee considering the purchase of a franchise?
- ARE THERE ANY REQUIREMENTS TO FRANCHISE A BUSINESS?
