Intro to Franchising IG - International Franchise Association

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✔ Obligations and duties of the franchisor. This section describes, in detail, all the services which the franchisor will provide: • training • operations support • advertising ✔ Obligations and duties of the franchisee. This section describes the franchisee’s responsibilities: • requirements for training • requirements for participation in the business • requirements for keeping and submitting adequate records ✔ Restriction on goods and services offered. This section describes any restrictions placed on the goods or services offered, including: • required quality standards • approved suppliers • approved advertising • hours of operation • pricing ✔ Renewal, termination and transfer of franchise agreement. This section includes: • the rights and obligations of a franchisee upon termination • descriptions about the transfer of the franchise agreement • descriptions about the renewal of the franchise agreement Make sure you hire an experienced franchise attorney to review the agreement! WHAT INFORMATION IS FOUND IN THE DISCLOSURE DOCUMENT (UFOC)? The purpose of the UFOC is to provide prospective franchisees with information about the franchisor, the franchise system and the agreements they will need to sign so that they can make an informed decision. The Disclosure Document (UFOC) ✔ Item 1: The franchisor, its predecessor and affiliate. This section provides a description of the company. 22 An Introduction To Franchising THE IFA EDUCATIONAL FOUNDATION
✔ Item 2: Business experience. This section provides biographical and professional information about the franchisors and its officers, directors and executives. ✔ Item 3: Litigation. This section provides relevant current and past criminal and civil litigation for the franchisor and its management. ✔ Item 4: Bankruptcy. This section provides information about the franchisor and any management who have gone through a bankruptcy. ✔ Item 5: Initial franchise fee. This section provides information about the initial fees and the range and factors that determine the amount of the fees. ✔ Item 6: Other fees. This item provides a description of all other recurring fees or payments that must be made. ✔ Item 7: Initial investment. This item is presented in table format and includes all the expenditures required by the franchisee to make to establish the franchise. ✔ Item 8: Restriction on sources of products and services. This section includes the restrictions that franchisor has established regarding the source of products or services. ✔ Item 9: Franchisee’s obligations. This item provides a reference table that indicates where in the franchise agreement franchisees can find the obligations they have agreed to. ✔ Item 10: Financing Available. This item describes the terms and conditions of any financing arrangements offered by the franchisor. ✔ Item 11: Franchisor’s Obligations. This section describes the services that the franchisor will provide to the franchisee. ✔ Item 12: Territory. This section provides the description of any exclusive territory and whether territories will be modified. ✔ Item 13: Trademarks. This section provides information about the franchisor’s trademarks, service marks and trade names. ✔ Item 14: Patents, copyrights and proprietary information. This section gives information about how the patents and copyrights can be used by the franchisee. ✔ Item 15: Obligations to participate in the actual operation of the franchise business. This section describes the obligation of the franchisee to participate in the actual operation of the business. THE IFA EDUCATIONAL FOUNDATION An Introduction To Franchising 23
Page 1 and 2: An Introduction to Franchising IFA
Page 3 and 4: An Introduction to Franchising IFA
Page 5 and 6: Chapter 1: An Introduction To Franc
Page 7 and 8: Restaurants KFC McDonald’s Pizza
Page 9 and 10: WHAT ARE THE ALTERNATIVES TO FRANCH
Page 11 and 12: Disadvantages: ✔ The franchisee i
Page 13 and 14: UNIT 1: AN INTRODUCTION TO FRANCHIS
Page 15 and 16: Chapter 2: Beginning Your Search Wh
Page 17 and 18: What Business Should You Start? “
Page 19 and 20: Determine If You Can Make Enough Mo
Page 21 and 22: ✔ Carefully study and obtain prof
Page 23 and 24: UNIT 2: BEGINNING YOUR SEARCH WORKS
Page 25: Chapter 3: Navigating the Paper Tra
Page 29 and 30: ✔ Be sure you know what services
Page 31 and 32: THE IFA EDUCATIONAL FOUNDATION SAMP
Page 33 and 34: SAMPLE INCOME STATEMENT ABC SLEEPWE
Page 35 and 36: UNIT 3: NAVIGATING THE PAPER TRAIL
Page 37 and 38: Chapter 4: Evaluating a Franchise--
Page 39 and 40: About training: ✔ What are the lo
Page 41 and 42: ✔ Are the manuals updated on a re
Page 43 and 44: Entrepreneurial self-assessment: St
Page 45 and 46: Do I Have What It Takes To Be A Fra
Page 47 and 48: ■ Does the franchisor staff atten
Page 49 and 50: ✔ Watch the details. ■ Success
Page 51 and 52: Chapter 5: Writing A Business Plan
Page 53 and 54: III. WHAT DOES A BUSINESS PLAN LOOK
Page 55 and 56: ✔ Summarize the entire Plan ✔ B
Page 57 and 58: 5. Establish a marketing budget. If
Page 59 and 60: REVIEW QUIZ Match term on left with

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