The first step to investigating any franchise is to get your
hands on the system's Uniform Franchise Offering Circular.
Don't be intimidated by the formal name of the document (just
call it the UFOC) or the somewhat hefty stack of papers it
contains. The UFOC is a lot less scary than it looks. To prove it,
we've broken down exactly what information all the sections,
titled Items, contain. Once you see how simple the UFOC really is
to read, you'll find it's one of your best tools for
franchise research and comparison.
Items 1 through 4: The
franchisor's background, the experience of key executives and
the company's litigation and bankruptcy history
Items 5 and 6: All the fees
charged by the franchisor
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Item 7: An estimate of the
total investment needed to establish the business
Item 8: Restrictions on the
purchase of products to be used and sold in the unit
Item 9: The franchisee's
obligations
Item 10: Financing that the
franchisor makes available
Item 11: A summary of the
services, such as training and site selection, that the franchisor
provides in relation to the franchise program
Item 12: Territorial
protections
Items 13 and 14: The status
of the trademarks, copyrights and patents associated with the
program
Item 15: Obligations of the
franchisee to participate in the actual operation of the franchised
business
Item 16: Restrictions on
what the franchisee can sell
Item 17: Renewal,
termination, transfer and dispute resolution provisions
Item 18: Public figures used
to promote the franchise
Item 19: A description of
how well the franchises perform financially
Item 20: System statistics
and lists of franchisees and former franchisees