Franchising FAQ - What information should be looked for in a disclosure document?

Date: March 04, 2011

Q. What information should be looked for in a disclosure document?

A. Essentially, the disclosure document provides a snapshot of the franchise business.  The disclosure document will contain information such as:

• A description of the franchisor, its directors, senior managers and their experience;
• A detailed description of the business being franchised;
• Information about the franchise agreement;
• What payments the client will need to make to the franchisor and to others to establish the franchise business.  Examples are the initial franchise fee, equipment and fit-out costs, security deposits, and working capital;
• What a client can expect to earn from the franchise business;  and
• A list of company-owned and franchised outlets of the business.