Franchise Flag Maker

Since the new FTC Franchise Rule became effective in 2007, many persons wonder what the major differences are between the old Uniform Franchise Offering Circular (UFOC) and the new FTC Franchise Disclosure Document (FDD). Of particular interest to franchise companies is how long it takes to convert an old UFOC to the new FDD format. Franchise buyers wonder if anything has changed about when an FDD must be given to them under the new regulations.

FDD vs. UFOC

In summary, what the FTC’s new Franchise Disclosure Document or FDD format does is take the prior Uniform Franchise Offering Circular disclosures, modify them in certain respects and rename the document. It’s now called a Franchise Disclosure Document or FDD. There are still 23 individual Items (chapters) and although the revisions are not that substantive, they are numerous. A franchise attorney familiar with the new FDD format should be able to convert the old UFOC to a new FDD within ten to twenty hours, plus or minus. The Table of Contents for an FDD can be found within the information at the franchise a business page of the Franchise Foundations website.

FDD Phase In Period

The phase in period for the FDD is now over. The new FDD format was permissive starting July 1, 2007. It became mandatory starting July 1, 2008. So franchise companies cannot make any offers or sales using or distributing the old UFOC. The new FDD is the required format in all states as of July 1, 2008.

New FTC Franchise Rule Transactional Changes

A transactional change with the new FDD rules and regulations relates to the time a prospective franchisee must have the document in their hands before contacts can be signed or any money paid. The former rule said the UFOC had to be delivered at the "first personal meeting" and in hand for at least ten business days. A seperate, completed franchise agreement also had to be delivered to the prospective franchisee for at least five business days. Under the new FTC franchise rule, the first personal meeting requirement is eliminated, replaced with a fourteen calendar day minimum review period that simplifies the complexity of completing franchise transactions. There’s another seven calendar day contract reiew period that kicks in if the franchise company makes unilateral and material changes to the franchise agreement (or other agreement) attached to the FDD.

Electronic Delivery of FDD

Stepping into the 21st century, the new FTC Rule permits delivery of the FDD by electronic means, such as email and downloading from a website. The cover page of the FDD now contains the franchise company’s website and email address.

Copyright 2008-2009 Kevin B. Murphy, B.S., M.B.A., J.D. – all rights reserved

For more informatiion, visit the Franchise Foundations website.

Is buying a business franchise a right step for you? This question tends to crop up as the most crucial query in your mind, once you are struck with the idea of taking up a business franchise. Here, the point lies in recognizing your passion and interests in a particular field of business, and the willingness to accept the ongoing risks and other demerits ’sportingly’. Business franchises in general is one of the best means to earn loads of money. However, as mentioned earlier you must spend considerable time to understand the intricacies of running a franchise, the selling aspects, the risks, the potential returns and other details – before you settle on to purchase a franchise business.

Here are some easy tips to help you decide ‘whether a business franchise is your cup of tea’.

Area Of Interest – The very first and significant point while selecting a business franchise you have to consider is buy a franchise that you are interested in. This will further instigate you to gain further knowledge and skills required in the business. Once you become an expert you are more likely to succeed in your trade, since a specialist knows the essentials to run a successful business. While you blend pleasure with your task, your business turns a task of joy and not a chore. Eventually, your love will picture the enthusiasm you infuse in the trade and your customers will certainly notice this. People prefer to deal with enthusiastic sellers. Business is all about gaining the faith of your customers, and faith can readily come from the expertise you display. Since customers always trust experts. Thus, recognize your area of interest before starting a business.

Investment – Now, once you recognize your passion and field of interest next comes your investment part. Every business franchise has its individual cost. While selecting or planning to take up a business franchise, ensure that you can put in the requisite investment to initiate and continue the trade.

Knowledge – A true business owner must acquire selling skills. Yes, once you settle on to own a business training franchise you must know the basic marketing skills. To flourish your business and take it to the next level, professional selling skills are the need of the day.

Staff Selection – Apart from the above-mentioned aspects, another major section is selecting the best professionals to run your business training franchise. Pick up the best team members and make sure you have regular discussions sessions with them. Communicate your ideas and to-dos to run the trade, and make sure you welcome suggestions from the franchisors too.

If you find the above criteria’s manageable then business franchise is definitely for you, so what are you waiting for there are numerous franchises for sale. Pick up the business franchise that interests you the most today.

When buying a franchise opportunity the choice is yours as to whether you are set up for life or losing your life savings so investigate, investigate, investigate.

There are many advantages to Franchising. When you buy into a trusted name, take on its fame and programs, you can be sure to have a business that people will recognize quicker than a start-up mom and pop-type business. In fact, it’s one of the most common business expansion tools. Not only this, but entering into Franchising is like entering into a family: there are other people there who will help you with everything from day-to-day operations of your business to buying your business’s equipment at the lowest price possible.

One of the biggest advantages of Franchising is the draw of the brand name. People recognize brand names, and because of this, the name of a business is worth quite a bit. People come to trust names they see again and again because they associate this frequency with quality and consistency. Soon, people become loyal to certain brand names. Franchising helps develop a brand name’s worth by upping the number of businesses popping up around the world.

Buying into a franchise is smart because it will make dealing with banks easier. A bank is more likely to give you money if they know you’re investing in something that has found success before. Additionally, if people know the name of the franchise, it will make it easier to attract customers to your establishment.

Another great plus to Franchising is that a person doesn’t have to market their business or learn how to do such things as accounting or distribution: The business’s model is already firmly in place. Many statistics say that as many as 90% of new businesses fail in the first few years because it’s hard to get the business generating funds while learning the ropes of what works and what doesn’t work. A franchise’s model is proven – it’s why people what to buy into the business – and it makes it easier to keep your business afloat. Once you’re in charge of a franchise, you’ll have a manual that explains the business’s ins and outs and will make day-to-day operations easy as pie.

When it comes to a franchise, it’s easier to buy your equipment and materials because people know the name. The other folk involved in the franchise system will be a great support system when it comes to buying materials. Additionally, one of the biggest advantages of Franchising is that you don’t have to spend as much on marketing and publicity: the more franchises there are, the more publicity you’ll receive. The sheer number of businesses helps establish a brand’s credibility.

Ultimately, there’s less risk involved with opening a franchise, and this is perhaps Franchising greatest advantage. Though the cost may be high to buy into a well-respected name, the possible rewards are much higher. As always you need to ensure your research is done in a manner which means you have all the facts in place, doing your due diligence will ensure that not only the franchise is right for you but that it is one that is going to be value for money too.