Federal Disclosure Document Review Lawyer

Franchise disclosure document review lawyer Mario Herman and Gregory Heramn advise prospective franchise owners and franchisees of the ins and outs of preparing and analyzing the franchise disclosure document. Before any money changes hands, a prospective franchisee must be presented with the franchise disclosure document, which outlines and explains the rights and responsibilities of both the franchisor and the franchisee. The Federal Trade Commission requires that prospective franchisees receive the franchise disclosure document at least 14 days before being asked to sign a contract or to accept money from the franchisee.

The franchise disclosure document provides detailed information about the franchise organization and its executives. The purpose of the document is to prevent fraud and provide a prospective franchisee with all the information necessary to make an informed decision before purchasing a franchise. The list below is a few examples that the franchise disclosure document should answer:

Who is the Franchisor? Are there any parent companies, and if so, which ones are they affiliated with?
What is the identity of the executives of the company, the CEO, COO, etc.? What is their complete educational and employment/business history?
Do the franchise’s executives have a criminal background? Is there a history of any litigation their companies have been involved in?
Has the franchisor ever filed for bankruptcy?
What is the total dollar amount of the initial and ongoing franchise fees?
What are the training and advertising fees?
What limitations are placed on the franchisee’s ability to purchase inventory or procure goods for sale?
What is the total initial investment?
What are the obligations of the franchisee?
What financing sources are available, if any?

Franchise disclosure document lawyer Mario Herman and Gregory Herman work with prospective franchisees to help them fully understand the agreement in advance and make a well-informed investment decision.