Misleading, Fraudulent or Incomplete Franchisor’s Disclosure Document

Under the business law statutes of the Federal Trade Commission (FTC), the owner of a franchise business is required to disclose certain information to a potential franchise buyer in the Franchise Disclosure Document. A Franchise Disclosure Document must be given by a corporation to a prospective franchisee at least 14 days before any deals are made.

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Franchisor’s Disclosure Statement

The franchise disclosure statement or circular offering (UFOC) requires data and information from the franchiser in over 20 categories. Cover pages of the offering circular must spell out any risk factors in bold type, and where the dispute may be resolved; the costs involved; the effective date of the offering; and the state law controlling the franchise agreement.

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