What state or federal statutes or agencies regulate franchising and the sale of franchises?
A federal regulation and the laws of some 15 states require franchisors to prepare a detailed disclosure document known as a Uniform Franchise Offering Circular (UFOC). The UFOC must be given to all prospective franchisees for a specified period of time before a franchisor can sell a franchise to a prospective franchisee. The UFOC contains 23 different sections each dealing with a specific category of information about the franchise system. You should review each and every one of these sections and the franchise agreement itself with your attorney and your accountant as appropriate before purchasing a franchise.
