The Federal Trade Commission requires franchisees to disclose 23 points relevant to the possibility of franchising, including: as provided by a professional sports federation, the franchise is a privilege to establish a team in a given geographical area under the aegis of the league it issues. It is only an impersonal right. The FTC rule requires franchisees to make available to potential franchisees a Presal Disc Disclosure (FDD) document intended to provide potential franchisees with the information necessary to purchase a franchise. Risks and opportunities, as well as comparing the franchise with other investments, are part of the reflection. As a franchisor, you lend your brand to your franchisee. This is a big risk if you don`t properly protect yourself and your brand. For this reason, it is important to set rules about the nature and sound of your trademark, when you should use the intellectual property protected by trademark law, what advertising can be done, and what else the franchisee should know about using your trademark. A franchisee must disclose the context of the business, including the business experience of its senior executives, over the past five years; if one of its officers has been convicted of a crime within the last seven years, has avained himself of fraud, has been held liable for fraud in a civil action, is subject to a court decision in force or a decision of the administrative authority concerning franchising or fraud or has participated in bankruptcy proceedings or business reorganization for bankruptcy in the last seven years. Where the franchisor makes claims about the actual or anticipated sales of its franchises or their actual or potential profits, facts must be provided to support those claims. Some written contractual agreements are sometimes referred to in bulk as franchises, although they do not have the essential elements because they are not conferred by any sovereignty. The franchise system or method of operation has grown phenomenally, especially in consumer goods sectors such as auto sales, fast food and ice cream. Using a franchise in this way has allowed individuals with minimal capital to invest to become successful members of the business world.
In the United States, a company becomes a franchise if it meets the definition of the Federal Trade Commission (FTC), known as the FTC Franchise Rule. According to the FTC franchise rule, there are three general requirements for a franchise agreement to be considered official: 1) n. a right granted by the government of a person or company, for example.B. a taxi permit, a bus line, the use of a public airport by an airline, a business license, or business experience. . . .