You indicated that the UFOC is about to have its name changed. Will the content also change, and how will this affect franchisors and franchisees?
The old UFOC (uniform franchise offering circular) is now being replaced by the FDD (franchise disclosure document). The change was optional as of July 2007, and required beginning July 2008.
They are not terribly different in terms of content. But, the biggest change, at least in my opinion, is the lessening of disclosure requirements regarding “brokers”.
In the past, if a franchisor used the services of a franchise broker (sales people who invariably want to be titled franchise ‘consultants’), then the franchisor was required to disclose certain background information about the broker. That information could be critical to the buyer because the required information would force disclosure of bankruptcy or legal actions involving the salesperson. Without this information, the buyer really has no idea of the broker’s past. I think that removing this requirement was not a wise decision. While it is true that the broker will at least be named on the document’s ‘receipt page’, the buyer is still without information that I believe is important.
You can now research franchise opportunities on the AllBusiness franchise directory.