The franchise offering circular is required by law to be sent to your franchise applicants because it discloses everything they need to know before buying a franchise in your business.

The franchise offering circular is one of two or three franchise documents that make up the foundation of any great franchise relationship you will build.  When a potential franchise owner begins to poke around and sends up signals that he or she might be ready to buy into your business, the most important thing that can happen is to bring them up to speed with who you are, how they should get jump through the right hoops of buying a franchise and what life will be like when they are a full fledged member of your franchising community.

The franchise offering circular has gone through a lot of evolution in the last few years.  It is a standardized format because it is a document that you are required to send to a new franchise owner within the last few weeks before the deal is done. It is also a document that can get quite bulky because there are 23 different areas of disclosure that you have to cover when organizing a franchise offering circular to send it out to your future partners in money making.

That evolution has been so dramatic that the name of the franchise offering circular has gone through change as well. These days it is most commonly referred to as the franchise disclosure document or FDD for short.  The name change is worth tucking away in your memory banks because when the FTC begins to ask questions about your FDD so they can give you the nod to keep your franchise momentum going, it is good to know what they are talking about.

The name change from franchise offering circular to franchise discloser document puts the emphasis on an important word – disclosure.

For once, the government pencil pushers came up with a pretty good name change for the franchise offering circular.  For one thing, this disclosure document is far from a circular.  When we think of a circular, we think of that 5 page advertisement that you get from the grocery store that lists the specials of the week each Wednesday.  The franchise offering circular, or the FDD as we call it in these modern times will commonly get to a very impressive size.  Some complicated versions of the franchise offering circular have gotten as big as 500 pages long.

If you think putting together the franchise offering circular is a chore for you, think about the future franchise owner getting that encyclopedia of franchising in the mail.  As a disclosure document, they are expected to be aware of everything you are disclosing to them in the franchise offering circular. When they sit down to sign that franchise agreement and make this new partnership a formal affair, there is no saying they were not informed. So you make sure you pour your heart out in that franchise offering circular so if there are any questions or disputes once the franchise is open and money is being made, you can always point to that disclosure document and say, “Hey it is all right there in black and white for anyone to see.”

 

Every franchise document that must be signed is a step toward your success and happiness as a future franchise owner

Each franchise document is just as much of the dream of owning your own franchise as the rewards you seek. The image you might have in your mind about owning a franchise may be a vision of opening the doors to your wildly successful business with customers forcing their way in with money clenched in hand to spend in your store. But the reality is that there are some details to cover along the way. Above all, to get from here to there, you need plenty of franchise information so you know what you are doing when you fork over your hard earned money to buy your own franchise business. Each franchise document that you must review will give you the clues to the puzzle to how to become a big winner in the game of owning your own franchise business.

There are a couple franchise documents that may seem dry and dull but understanding them can make you a happy camper in the franchising world.  You can learn about franchise operations by sitting around a McDonalds and taking notes. But looking at each franchise document is a smarter way to go and a better use of your time to boot.

An important franchise document with a strange name is the Uniform Franchise Offering Circular because it makes it sound like junk mail you get from your grocery store. Instead, the UFOC represents one of the most detailed documents you will get that lays out in plain English not only what you and the franchising company must do to make your partnership fly like an eagle but exactly how much it is all going to cost.  The number crunchers in the accounting department will like that.

The franchise agreement is a franchise document that means the day you open your doors of your own small business is right around the corner.

Next to the UFOC, the franchise document that can most change your life is the franchise agreement. Look at this document like the marriage license in terms of its importance. There is no romance here but when you and the franchisor sign the franchise agreement, your franchise relationship is set in stone and you are ready to make some serious money.

You can expect both the UFOC and the franchise agreement to be delivered to you in the two weeks before the franchise partnership is about to become a reality. Yes, you can believe it that each franchise document is important. It is important because they will change you from a casual observer into a full fledged franchisee.  But they are also legal documents that you and the franchisor will sign that puts the relationship into motion.

So that is why they are like a marriage license without the cake or the “kiss the bride” part.  But you can stage a big celebration and bring your own cake because once you have mastered and signed every franchise document, your new business will be ready to go for the gold.  That is worth a cake and a kiss from somebody to be sure.

Review of the UFOC or the Uniform Franchise Offering Circular Is step one toward owning your own profitable franchise

Every industry is loaded down with weird acronyms.  To become a guru of franchising, be sure you know all about the the Uniform Franchise Offering Circular or the UFOC for short. It is one of the “must do” hoops to jump through before you can strike it rich franchising a business.

There is no dodging this step in your noble journey toward franchising. The franchise offering circular is a step on that journey worth dawdling on a bit.  The franchise offering circular is a physical document that will show up on your doorstep from the company selling the franchise to you. This is not junk mail so jump all over the franchise offering circular. It is chock full of information that you need to know.

If you ever made a document your Bible, the franchise offering circular is one you should know inside and out.  The law requires that every detail about what will happen when that franchise transaction hits the books has to be spelled out in the franchise offering circular. That means that who you have to salute is in there and how you can expect to be saluted is in there too.

The franchise offering circular must be written in language that people speak.

Don’t run into the closet and hide from the franchise offering circular.  It is one of those franchise agreements that can clear up any deep dark mysteries that may be lingering in your head about buying that franchise. The franchise offering circular will spell out in precise language exactly what you can expect from the franchisor. It also lays out in no uncertain terms what is expected of you.

Probably the tidbits of information that can change your life the most in the franchise offering circular are the financial details about the transaction and the cost of running the franchise once the doors are open. This is “need to know” stuff because the franchise offering circular can be used to get financing and to lay out your budget so the bean counters in your company can make sure they have their ducks in a row.

You should be chomping at the bit to get your mitts on that franchise offering circular.  If the franchisor stalls out on providing you with a very detailed franchise offering circular, it is time to look for a better franchisor.  There are twenty one different kinds of disclosures in the franchise offering circular and every one of them is important.

The franchise offering circular is a legal document so don’t be afraid to get your own legal eagles to look at it. But the law requires that the franchise offering circular be written in language that regular human beings can read instead of a bunch of legal mumbo jumbo.  So make sure you get it, know it and love it when the time comes to exchange the franchise offering circular. You will be glad you did.