The Franchisor Must Tell All
Monday April 14, 2008
According to the new Franchise Disclosure Document (which all franchisors must follow by July 2008) franchisors must disclose all information to a potential franchisee. This includes any lawsuits or bankruptcies.
They must also disclose how many franchises have been sold, terminated or transferred in the past 3 years. In addition, the franchisor must reveal whether any officer of the franchise has any interest in all approved suppliers.
After seeing these changes made it makes you think... "Why did the FTC wait about 30 years to add these requirements?" These changes were well overdue.
Thanks excellent news. i currently own a franchise and the franchisors are very evasive about the failure rate. They tell me they cant sell mine, but in their sales letters they describe a huge demand for this franchise…fishy!