Obtaining and Analyzing Franchise Financial Information

If you are serious about a particular franchise opportunity you will be given a copy of the franchisor's Uniform Offering Circular (UFOC), which contains financial and material information about the

franchisor. The Federal Trade Commission (FTC) mandates that franchisors provide a financial disclosure document to all prospective franchisees prior to signing the Franchise Agreement. This document is an integral part in the franchise selection process, as it discloses everything material about the company, both good and bad.

It is a highly recommended that you seek assistance when reviewing financial information, such as from an accountant. Hiring an accountant to review the UFOC and financial statements may cost anywhere from a few hundred to several thousand dollars, but if you compare this cost to the overall financial investment you are preparing to make, it may pay off if they uncover negative information. A franchise attorney can look for potential clauses that could lead to problems.