UFOCs Explained

What is a UFOC?

The UFOC is the most important document any prospective franchisor can read prior to investing and provides potential purchasers with the important information they need to make fully informed decisions about investing in a franchise.

The UFOC contains crucial information you need to gather in the entrepreneurial research stage – before you commit to a franchise.

  • How many franchises have been involuntarily liquidated and under what circumstances?
  • What is the contact information for those who have sold their franchise or were forced to leave the franchise?
  • Do the franchise company officers have a criminal record or have they declared bankruptcy?
  • Has the franchise ever changed its identity?
  • What happens to your business when your franchise agreement expires?
  • Will you be able to keep your business or even stay in the industry at the conclusion of the agreement?
  • Is the franchise company permitted to open a corporate store right down the street from your location?

The answers are in the UFOC.

Unwary investors, rushed into rash decisions by unscrupulous franchise salesmen and ‘consultants’ have paid huge financial and personal penalties for their lack of preparation and knowledge.

Only by comparing the litigation, financial and franchisee relationship aspects of two or more franchises will you have any idea if your making an enormous mistake or the correct investment.

Don’t become emotionally, financially, or psychologically committed to a franchise untill you have the answers contained in the UFOC.

The UFOC contains 23 sections including:

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