Franchises - Understanding the UFOC

Posted by Sara

May 3, 2008

What is the UFOC?

Uniform Franchise Offering Circular (UFOC) is the detailed and extensive information bible to the franshise. It will contain detailed financial statements, sample contracts, and the franshise system it offers. Also called the “Franchise Disclosure Document” or “Offering Propectus”, the format and presentation is prescribed by federal and state laws.

A typical UFOC can be as large as 400 pages, expensive to reproduce, and required reading by a franchisee (careful required reading). Not everyone will get UFOC, a casual investor will not warrent getting one, but if you visit company HQ and and are serious about investing in the franchise it is legally required you have a UFOC before contracts are signed.

The UFOC contains a lot of very important information. Too much to list here. As an investor it is a time consuming task to read a UFOC but if you are serious in your investment then NOT reading it will be the biggest mistake you will ever make. While the UFOC contains a lot of important information for the franchisee, make note it does not contain all the information you will need to make a choice.

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