内审工作总结标题：To Franchi or Not to Franchi
windows平板电脑原文：
Since 1971, when the state of California enacted its own state franchi law, many rules and regulations have been established to regulate the operation and disclosure of franchising business. Franchising laws have been developed to curb the tide of illegal and fraudulent activities on the part of many franchisors during the 1950s and 1960s. A patchwork of legislation emerged during the early part of the 1970s which was designed to combat the alleged abus and wrongs occurring in franchising operations. The rules and regulations were designed to require the franchisor to disclo, before the sale of the franchi, information regarding the operation of the franchi.
On 21 October 1979, the Federal Trade Commission (FTC) established the franchi rule entitled "Disclosure Requirements and Prohibitions Concerning Franchising and Business Opportunity Ventures" (FTC rule 436). This rule requires disclosure of specific activities prior to the sale of a franchi. The disclosures must be made to any prospective franchie at the first personal meeting between the franchisor (or reprentative) and the franchie for the purpo of discussing the franchi sale, or ten business days prior to the execution of any franchi document or the payment of
any consideration for the franchi, whichever is the earlier. This rule does not attempt to regulate the nature or substance of the franchisors/franchie relationship; rather it requires the franchisor to make specific disclosures or provide information about franchising activities to the prospective franchie. This rule was designed to rve two major functions:
(1) prevention of fraud or misreprentation of material facts; and
(2) prentation of relevant facts or information to prospective franchies.斩将夺旗
科比英文The final franchising contract must be delivered to the prospective franchie at least five days prior to the date on which the document is to be signed. The franchisor has the option of making the disclosures either according to the FTC Rule format or the Uniform Franchi Offering Circular (UFOC) which was developed by the North American Securities Administrators Association. The formats may not be mixed. The FTC Rule contains only 20 steps while the UFOC is a little bit longer and contains 23 steps. The FTC Rule format is accepted in only 42 states, while the UFOC format is accepted in all 50 states as well as in the province of Alberta.
The substance of the disclosures required by the UFOC and FTC are similar in nature. However, franchisors generally prefer to u the UFOC format becau of its acceptance in all the 50 states. T
he categories of information in the UFOC and FTC Rule formats include, but are not limited to: information about the franchisor and any predecessors, business experience of officers and directors, litigation history, bankruptcy, description of the franchi, funds required to be paid by the franchie, recurring fees payable to franchisor, obligations to purcha from franchisor or designated source, financing arrangements, supervision, territory and sales restrictions, trademarks, patents and copyrights, personal participation obligations, termination and renewal, statistical information concerning the number of franchis and company-owned outlets, public figure involvement, financial information concerning the franchisor, and the franchi contract.
As one can e from the above, there is quite a lot of information that the franchisor is required by law to divulge to the prospective franchie. Becau franchising can be subject to abu, it is critical that such information be available to potential franchie before he or she makes the final decision of whether to franchi or not.
9月是什么星座The question remains, however, as to what franchisors actually disclo and whether they follow the basic rules and format suggested by the FTC and UFOC. This is the question on which the prent study eks to shed light.
In an effort to ascertain how franchisors u the UFOC or FTC Rule formats, a letter of enquiry was nt to 216 franchisors in ven broad industries. A total of 101 franchisors responded, who also provided their UFOC or disclosure documents at the same time. The non respondents were randomly distributed and did not reprent any particular size, group or industry.
The information provided by the franchisors was classified into three categories: administrative matters, financial matters, and contractual obligations. The franchi disclosure documents contained a great deal of information about the franchisor and its administrative practices. In addition, they revealed a great deal of information about the financial obligations of the franchie towards the franchisor as well as information about the initial start-up expens for the franchie. Finally, the disclosure documents also contained information about the contractual obligations of the franchisor and franchie under the franchi agreement.
Regarding litigation history, the UFOC rules required disclosure with respect to three forms of legal activity (criminal, civil and administrative) in which the
franchisor or its officers may have been involved. This disclosure covers activities for the past ten fiscal years. It was found that 68 per cent of the companies were involved with litigation during that ti
me period while 32 per cent were not One of the reasons why some may not have been involved in litigation was becau they had not been in business very long.
The rules also require the franchisor to disclo its bankruptcy history as well as its directors and officers during the past 15 fiscal years. It was found that 18 per cent of the respondent companies have been involved in some form of bankruptcy, while 82 per cent have not.
Another administrative requirement which many franchisors require of franchies is the latter's actual participation in the operations of the franchi. Of tho companies reporting, 33 per cent required their franchies to participate while 67 per cent allowed for no participation or abntee ownership.
When a franchisor offers financial assistance to the franchie, such arrangements must be disclod in the disclosure document. The majority of the respondents, 55 per cent, did not participate in providing financial support to their franchies; however, it should be noted that 41 per cent did provide some form of financial assistance, while 4 per cent provided complete financial support to their franchies.
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Furthermore, any limitation regarding the territorial or geographical areas in which a franchie may
operate must be disclod under the law. It was found that 69 per cent of the respondents provided territorial rights or guarantees to their franchies while 31 per cent did not. When a franchie is granted an exclusive territory to operate, a written description of the territorial restrictions and boundaries must also be provided. The circumstances governing the maintenance of such exclusive territorial rights, such as meeting certain sales goals, must also be stated.
Many franchisors require their franchies to purcha goods or equipment from approved suppliers or specific sources. If this is the ca, the franchisor is required to describe the goods or rvices and explain to the franchie whether the franchisor is affiliated with any of the business. The study revealed that franchies were required to purcha from approved suppliers approximately 90 per cent of the time.
A franchisor must disclo the amount, method of payment, time of payment, and refund ability of the initial franchi fee that has to be paid to acquire and t up the franchi. Most initial fees are t at a fixed dollar amount by the franchisor for each franchie. The results reported that 74 per cent of the respondent franchisors
provided a specific dollar amount while 25 per cent disclod a dollar range depending on the numb
er and kinds of franchis to be opened. Additionally, 1 per cent provided a percentage figure rather than a dollar figure for the initial fee. Almost every franchisor requires their franchies to pay a percentage of the latter's gross revenues back to the franchisor either on a weekly, biweekly, or monthly basis. The study reported that 81 per cent of the franchisors required a specific percentage of gross revenues to be paid for royalty fees, while 12 per cent disclod a percentage range depending on the number of stores established and sales volume of the stores. In addition, 4 per cent disclod that no royalty was required while 2 per cent required a fixed dollar amount for royalty fees bad on a monthly charge period. Franchisors also usually require franchies to pay specific advertising fees as a percentage of the gross revenues of the business. The study reported that 68 per cent of all franchisors required a specific percentage of such fees to be paid. In addition, 16 per cent provided a percentage range bad on the number of stores and sales volume, 13 per cent disclod no specific amount, and 2 per cent required a specific dollar amount to be paid each month to the franchisor.
While some franchisors do provide leasing opportunities for franchies, it was found in the survey that 98 per cent did not disclo leasing fees in their disclosure documents, while 2 per cent ud a percentage lea fee for equipment rented from the franchisor.
上海的英文Some franchisors also require the payment of a transfer fee to be paid directly to the franchisor when the franchie transfers ownership. However, it was found that 55 per cent of the respondent franchisors did not require a transfer fee to be paid, 32 per cent required a specific dollar amount, 8 per cent disclod a dollar range depending on the number and size of stores, and 5 per cent required a percentage figure bad on the sales of that particular store .
The franchisor is required by law to disclo estimated expens for starting up the franchi. The expens generally include items for equipment, working capital, inventory, signage, land and buildings. This is a turnkey cost and needs to be documented and estimated by the franchisor.
It was found that 83 per cent of the franchisors provided a dollar range in estimating the initial start up expens for the franchie, while 14 per cent provided actual dollar amounts for the establishment of a franchi programme. Only 3 per cent did not provide information about the initial start up expens.
Franchisors also may provide projected earnings claims for franchies. This may be the most nsitive area of the franchi sales programme as well as the franchi disclosure documents. Most sales reprentatives of franchisors are eager to provide earnings claims for franchies. How
ever, if the franchisor does provide an earnings claim, they must comply with either the FTC Rule or the UFOC format. Any written, visual or oral reprentation of financial information must be supported by disclosure information. Becau of the rigid requirements established by the FTC and the UFOC, only 26 per cent of the respondents provided some form of earnings claims for the franchies.
畲族When earnings claims are provided, a parate "earnings claim document" must be furnished to each prospective franchie. This should include all claims about actual or projected sales earnings or revenues. This information must be supported and documented by the franchisor.
There are many contractual obligations which a franchisor must disclo in the franchi documents. One of the is simply the term or duration of the franchi contract. While the average marriage in the United States lasts about eight years, the average franchi agreement lasts for a much longer period. The results of this survey indicated that 78 per cent of all franchi agreements are for ten to 20 years. Additionally, 12 per cent are for five years, and 4 per cent are for three years or less. The franchisor is also required to disclo the length of the renewal term if the franchi contract is renewable. This renewal term may be for the same duration as the original contract or for any other period. The results indicated that most of the renewal contracts are for ten years (37 per cent), five
years (27 per cent) or 20 years. The franchisor must also disclo how a franchi may be terminated. All disclosure documents reviewed in this study indicated that the franchisor does have the right to terminate the franchi agreement. It was also found that71 per cent of the companies allowed the franchie to terminate the agreement at the latter's request.
出处：Peng S. Chan, Robert T. Justis .To Franchi or Not to Franchi?[J]. Management Decision, 1993. 31(5),pp22-26
