Wondering how to start franchising? We've got some great advice
on franchising from one of the nation's leading franchise consultants,
Ed Teixeira.
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Implementing a franchise program allows you to duplicate the successful elements of your operations and replicate them around the country with the assistance of motivated franchisees. The process involves five simple steps:
In this third part of a five-part article, we discuss Completing
the Uniform Franchise Offering Circular (UFOC).
Completing the Uniform Franchise Offering Circular (UFOC)
For this activity you’ll need the services of a franchise
attorney. Using the results of a questionnaire and/or meeting with
your attorney and key items from the aforementioned exercise your
franchise attorney will construct the franchise agreement.
You and your consultant will provide key input for the business
items and your attorney will provide the legal provisions that need
to be in the agreement. The cost of a UFOC and franchise agreement
will be in the $18,000 -$20,000 range or more!
This doesn’t include the filing fees for various state registrations.
There are 15 registration states which require that the UFOC be
filed and where necessary conform to that state’s franchise
regulation.
It’s not necessary that the UFOC be registered in a particular
state unless the franchisor offers franchises from that state or
offers franchises to residents of a registration state.
If a franchisor is operating from New York they must be registered
in New York state but can’t sell to candidates in the other
registration states unless the UFOC is filed in that state. Under
this example a franchisor could still sell franchises in 36 states.
Don’t have an agreement done until you’ve put your
program together and have the capital to start off on the “right
foot.”
Ed Teixeira is President of FranchiseKnowHow, LLC,
a franchise consulting firm; and a managing principal in the Bridge
Business Broker Franchise Company. He may be reached at (631) 246-5782
or at www.franchiseknowhow.com.
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