Comply With Disclosure Requirements

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What are disclosure documents?

Comply With Disclosure Requirements

Disclosure documents were created in response to some unethical behavior in the 1960s and 1970s when franchises were not regulated. Today, the Federal Trade Commission (FTC) has an active interest in franchising and their Franchise Rule states what must be disclosed, and in what format. You cannot sell a franchise if you do not comply with the Franchise Rule.

The most common format for Franchise Rule compliance is the Uniform Franchise Offering Circular (UFOC), issued by the North American Securities Administrators Association. Guidelines for preparing UFOC disclosures are available from:

North American Securities Administrators Association
750 First Street, Suite 710
Washington, DC 20002
(202) 737-0900

www.nasaa.org

Franchisors who use the UFOC must follow these guidelines to comply with the Franchise Rule.

   

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