What is a UFOC?
Prior to the 60s, there was little franchising momentum in the US. However after the success of McDonald’s, many other companies began to franchise their concepts and the franchise industry expanded rapidly. In 1979 the Federal Trade Commission’s FTC Rule became effective. This rule required all franchisors submit to all potential franchisees a document called the Uniform Franchise Offering Circular (UFOC). The purpose of the FTC Rule (manifested in the UFOC) was to provide enough information so the prospective franchisee could make an informed decision about purchasing the franchise. The UFOC serves as a protection for the individual against making a decision based on information not supported by fact. The FTC Rule requires franchisors provide the UFOC to the prospective franchisee at the earlier of the first personal meeting or 10 business days before the franchisee signs an agreement or pays any money. It also provides that the franchise agreement must be given to the prospective fr
