The UFOC Has a New Name

The legal document that is provided by the franchisor to a potential franchisee prior to the completion of a sale is called the Uniform Franchise Offering Circular, or as many people call it, the "UFOC." This is being replaced by a new document, not only with a different name, but also with some new rules.

Although many people are still referring to this document as the UFOC or Uniform Franchise Offering Circular, as of July 2007 the Federal Trade Commission, the franchising regulator since the late 1970s, has renamed it the Franchise Disclosure Document or FDD. Franchisors have until July 1, 2008 to adapt to the new format.

The FDD will continue to provide necessary information to the potential franchisee so that a knowledgeable purchase may be made. However, there are several revisions to the UFOC that are expected to make this process more efficient for both the franchisee and the franchisor.

I feel the amended Franchise Disclosure Document offers a much needed update from the original UFOC created in 1978. It is great to see many changes that benefit the franchisee. If you are researching buying a franchise and are handed a UFOC instead of a FDD, don’t be alarmed. Franchisors have until July 2008 to make the switch.