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What the UFOC Items Mean

What do all those items mean . . . in plain English?

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The first step to investigating any franchise is to get yourhands on the system's Uniform Franchise Offering Circular.Don't be intimidated by the formal name of the document (justcall it the UFOC) or the somewhat hefty stack of papers itcontains. 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 isto read, you'll find it's one of your best tools forfranchise research and comparison.

Items 1 through 4: The franchisor's background, theexperience of key executives and the company's litigation andbankruptcy history

Items 5 and 6: All the fees charged by the franchisor

Item 7: An estimate of the total investment needed toestablish the business

Item 8: Restrictions on the purchase of products to beused and sold in the unit

Item 9: The franchisee's obligations

Item 10: Financing that the franchisor makesavailable

Item 11: A summary of the services, such as training andsite selection, that the franchisor provides in relation to thefranchise program

Item 12: Territorial protections

Items 13 and 14: The status of the trademarks, copyrightsand patents associated with the program

Item 15: Obligations of the franchisee to participate inthe actual operation of the franchised business

Item 16: Restrictions on what the franchisee can sell

Item 17: Renewal, termination, transfer and disputeresolution provisions

Item 18: Public figures used to promote the franchise

Item 19: A description of how well the franchises performfinancially

Item 20: System statistics and lists of franchisees andformer franchisees

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