CHAPTER 3 NAVIGATING THE PAPER TRAIL Flashcards
One of the main benefits you receive when purchasing a franchise is the use of well-known trademarks. This section lists the trade-marks, service marks or logos the franchisee is entitled to use.
Use of trademarks.
This section describes the exclusive area or territory granted to the franchisee.
Location of the franchise.
In this section, the duration of the agreement is specified. (FA)
Term of the franchise.
(FA) In this section, all the mandatory fees are described:
Franchisee’s fees and other payments.
(FA) This section describes, in detail, all the services which the franchisor will provide:
Obligations and duties of the franchisor.
(FA) This section describes the franchisee’s responsibilities:
Obligations and duties of the franchisee.
(FA) This section describes any restrictions placed on the goods or services offered, including:
Restriction on goods and services offered.
(FA) This section includes:
* the rights and obligations of a franchisee upon termination
Renewal, termination and transfer of franchise agreement.
KEY SUBJECTS IN THE FRANCHISE AGREEMENT (FA)
- USE OF TRADEMARKS
- LOCATION OF THE FRANCHISE
- TERM OF THE FRANCHISE
- FRANCHISEE’S FEES AND OTHER PAYMENTS
- OBLIGATIONS AND DUTIES OF THE FRANCHISOR
- OBLIGATIONS AND DUTIES OF THE FRANCHISEE
- RESTRICTIONS ON GOODS AND SERVICES OFFERED
- RENEWAL TERMINATION AND TRANSFER OF FRANCHISE AGREEMENT
(UFOC) This section provides a description of the
company.
Item 1: The franchisor, its predecessor and affiliate.
(UFOC) This section provides biographical and professional information
about the franchisors and its officers, directors and executives.
Item 2: Business experience.
(UFOC) This section provides relevant current and past criminal and civil litigation for the
franchisor and its management.
Item 3: Litigation.
(UFOC) This section provides information about the franchisor and any management
who have gone through a bankruptcy.
Item 4: Bankruptcy.
(UFOC) This section provides information about the initial fees and the range
and factors that determine the amount of the fees.
Item 5: Initial franchise fee.
(UFOC) This item provides a description of all other recurring fees or payments that
must be made.
Item 6: Other fees.
(UFOC) This item is presented in table format and includes all the expendi-
tures required by the franchisee to make to establish the franchise.
Item 7: Initial investment.
(UFOC) This section includes the restrictions
that franchisor has established regarding the source of products or services.
Item 8: Restriction on sources of products and services.
(UFOC) This item provides a reference table that indicates where in the
franchise agreement franchisees can find the obligations they have agreed to.
Item 9: Franchisee’s obligations.
(UFOC) This item describes the terms and conditions of any financing
arrangements offered by the franchisor.
Item 10: Financing Available.
(UFOC) This section describes the services that the franchisor will pro-
vide to the franchisee.
Item 11: Franchisor’s Obligations.
(UFOC) This section provides the description of any exclusive territory and whether ter-
ritories will be modified.
Item 12: Territory.
(UFOC) This section provides information about the franchisor’s trademarks, service
marks and trade names.
Item 13: Trademarks.
(UFOC) This section gives information about
how the patents and copyrights can be used by the franchisee.
Item 14: Patents, copyrights and proprietary information.
(UFOC) This sec-
tion describes the obligation of the franchisee to participate in the actual operation of the business.
Item 15: Obligations to participate in the actual operation of the franchise business.
