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What is a UFOC?

The Uniform Franchise Offering Circular, or UFOC, is a document that contains information franchisors must provide to franchisees by law. Its contents are regulated by the Federal Trade Commission. UFOCs are deemed to be reliable and if the information provided is false, franchisors are subject to civil penalties. However, the FTC does not require filings. There are 13 states that do keep UFOCs on file, and 23 states that require business opportunity disclosure filings.

The UFOC is designed to give prospective franchisees all the information relevant to a franchise offering. It is made up of three basic parts: 23 sections (called Items) describing various aspects of the franchise program; a set of the franchisor's audited financial statements; and a copy of each form or contract a franchisee is expected to sign if he/she intends to buy the franchise.

The standard Items in a UFOC are as follows:

  • Item 1: The Franchisor, It's Predecessors And Affiliates
  • Item 2: Business Experience
  • Item 3: Litigation
  • Item 4: Bankruptcy
  • Item 5: Initial Franchise Fee
  • Item 6: Other Fees
  • Item 7: Initial Investment
  • Item 8: Restrictions On Sources Of Products And Services
  • Item 9: Franchisee's Obligations
  • Item 10: Financing
  • Item 11: Franchisor's Obligations
  • Item 12: Territory
  • Item 13: Trademarks
  • Item 14: Patents, Copyrights and Proprietary Information
  • Item 15: Obligation To Participate In The Actual Operation Of The Franchise Business
  • Item 16: Restrictions On What The Franchisee May Sell
  • Item 17: Renewal, Termination, Transfer And Dispute Resolution
  • Item 18: Public Figures
  • Item 19: Earnings Claims
  • Item 20: List Of Outlets
  • Item 21: Financial Statements
  • Item 22: Contracts
  • Item 23: Receipt

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