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<h1>Franchise Financial Performance</h1>

Your status as either a potential purchaser or merely a curious
member of the public partially determines the amount and quality of
information you'll be able to discover about the financial
performance of a specific franchise. Potential purchasers are able
to find out about a franchise's financial performance via the
Federal Trade Commission's (FTC) Franchise and Business Opportunity
Rule. Under the Franchise and Business Opportunity Rule,
franchisors are required to make a series of detailed disclosures
to potential purchasers, either in the Uniform Franchise Offering
Circular (UFOC) form or in the form provided by the rule.
There are three basic parts in a UFOC:
1) 23 sections that describe the aspects of the franchise
program.
2) A set of the franchisor's audited financial statements.
3) A copy of every form or contract you will sign if you decide
to purchase the contract.
The rule requires companies to include a list of the names,
addresses, and telephone numbers of at least 10 recent purchasers
geographically closest to a potential franchisee in their
disclosures - this way, the franchisee can obtain legitimate
references. Once you have this information, you will be able to
contact recent purchasers and ask them questions regarding the
financial performance of the franchise you are looking into.
Be aware that the FTC does not require that disclosure
statements be filed. While franchisors do provide information to
potential purchasers, they are not required to file that
information with the FTC. It is possible, then, that only a
potential purchaser would be able to obtain detailed information
about a particular franchise. However, even if you are unable to
glean information from the FTC because you are not a potential
purchaser of a franchise, it may still be possible to find the
information you're seeking if that franchisor has filed a UFOC.
Fifteen states require franchisors to provide presale disclosures,
and most of these states do not provide copies of these disclosures
but permit review of the documents in person by appointment.
These states are:
California (filing required)
Hawaii (filing required)
Illinois (filing required)
Indiana (filing required)
Maryland (filing required)
Michigan (only notice required)
Minnesota (filing required)
New York (filing required)
North Dakota (filing required)
Oregon (UFOC filing not required)
Rhode Island (filing required)
South Dakota (filing required)
Virginia (filing required)
Washington (filing required)
Wisconsin (filing required)

<div>Author Info 

<a target="_new" href="http://www.sebastienpage.com">Sebastien
Page</a> is Director of Marketing for 
<a target="_new" href="http://www.worldfranchising.com">WorldFranchising.com</a>, a
website that provides 
<a target="_new" href="http://www.worldfranchising.com">franchise
information</a> to potential franchise buyers.
</div>

Article Source: <a href="http://www.innoarticles.com" title="Your #1 Source For Quality Articles">InnoArticles.com</a>
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