E-Books are big
business on the Internet these days. If you are not familiar with e-books,
they are simply books (usually less content than a printed book) that are
available for immediate download after purchase from a website. E-books are
great because they are easy to create, free to distribute and have a high
profit margin.
The old, familiar
Franchise Document,
the UFOC, will
soon be replaced by the Franchise Disclosure Document or
FDD. After July
1, 2008, all franchisors must use the new FDD guidelines
What is a UFOC?
The UFOC was a response to some unethical behavior in the 1960's and
1970's. Today franchises are regulated by law.
The Federal Trade
Commission (FTC) requires that certain information be
disclosed to potential franchisees before a contract can be signed or
any payment made. The information is presented to the prospective
franchisee in the form of a document -- the UFOC.
The
FTC
requires franchisors in every state to provide a UFOC. In addition, some
states require that the offering must first be approved and registered
by the state before it can be promoted to prospective franchise buyers.
These states include: California, Hawaii, Illinois, Indiana, Maryland,
Michigan, Minnesota, New York, North Dakota, Oregon, Rhode Island, South
Dakota, Virginia, Washington, and Wisconsin. Certain states, such as
Illinois and Minnesota, have even more stringent requirements for the
franchisor. This in turn affords better protection for the prospective
franchisee.
What
Does the UFOC Contain?
The UFOC contains 23 items of information that must be current as of the
completion of the franchisor's most recent fiscal year. If there is a
material change to the information in the document, the franchisor must
make a revision (to be issued quarterly). The disclosure document must
be given to a prospective franchisee at whichever occurs earlier: the
first personal meeting of franchisor and prospective franchisee or ten
working days prior to the execution of a contract or money payment to
the franchisor.
