10 Southeast Transaction Guide § 180.30

Summary

• [1] Disclosures Required by Rule.

  The Federal Trade Commission franchise disclosure rule [see 16 C.F.R. §§ 436.1, et seq.] requires a franchisor to disclose to a franchisee all specified information, such as the identity of the franchisor [16 C.F.R. § 436.5(a)], and the business experience of the franchisor’s directors [16 C.F.R. § 436.5(b)].

  The FTC disclosure rule requires that the franchisor disclose the following information [16 C.F.R. § 436.5]:

  • 1.Identifying information about the franchisor.
  • 2.The business experience of the franchisor’s directors and officers.
  • 3.The litigation history of the franchisor and its directors and officers.
  • 4.The bankruptcy history of the franchisor and its directors and officers.
  • 5.Initial and other fees.
  • 6.The estimated initial investment.
  • 7.Restrictions on sources of products and services.
  • 8.Obligations of the franchisee.
  • 9.Financing terms.
  • 10.Assistance provided by the franchisor.
  • 11.The territory.
  • 12.Trademarks.
  • 13.Patents, copyrights, and proprietary information.
  • ...