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The Rule does not require a franchisor to offer its FDD to a prospective franchisee who has already acquired a UFOC disclosure document prior to July 1, 2008, except she or he makes a reasonable request for the most recent disclosure doc and quarterly updates pursuant to Section 436.9 of the Rule. Specifically, a “franchise seller” might not “require a prospective franchisee to waive reliance on any illustration made within the disclosure document or in its displays or amendments.” sixteen C.F.R. § 436.9. Under the Franchise Rule, a prospective franchisee is entitled to regard as material each statement in a franchise disclosure document. The textual content of the Rule in addition to the Compliance Guide make it clear that section 436.9 displays a Commission finding that each disclosure required by the Rule is material to a potential franchisee’s investment choice. Similar details about a former franchisee who never opened an outlet, or whose franchise didn’t require a physical outlet, have to be included in the separate itemizing of former franchisees in Item 20. In making that disclosure, however, a franchisor is required to disclose the franchisee’s last recognized residence telephone quantity if a reasonable effort to obtain a current business phone number is unsuccessful. Section 436.1 of the amended Rule defines “franchisee“ as “any one who is granted a franchise.“ sixteen CFR 436.1.

Unincorporated Business Franchise Tax

Consequently, Commission workers will not recommend initiation of enforcement actions within the circumstances discussed above. If, as is … Read More