FRANCHISE LAW SOURCE MANAGES YOUR FDD PRODUCTION AND DISTRIBUTION
The FTC Franchise
Rule requires that your Franchise Disclosure Document be provided to
prospective franchisees fourteen calendar days before the execution
of the franchise agreement. Also, you must deliver the completed franchise
agreement to the prospective franchise at least seven calendar days
befour execution. Untimely disclosure and contract delivery are common
claims against franchisors.
The other major
source of mistakes and legal violations in the franchise sales process
is the distribution of an FDD that may be outdated or contain obsolete
or inaccurate information. Keeping track of the changes in a company’s
FDD over time and making sure that the current version is used at all
times is a difficult task. Furthermore, the franchisor must be careful
to provide customized disclosures to prospects in certain states where
regulations differ from the format required by the FTC Franchise Rule.
the Major Sources of Franchisee Claims
Failure to make timely disclosure and the use of inaccurate or obsolete
disclosure materials, provide plaintiffs’ lawyers with the bulk
of the claims that they file against franchisors.
In order to avoid
and defeat these sorts of claims, a franchisor must have a system in
place for making accurate and timely disclosure to all prospective franchisees.
They must also maintain an accurate record keeping system that allows
them to prove when and how proper disclosure was made.
Set Up a
Turn Key System for Timely and Accurate Disclosure
At Kern & Hillman, LLC, in addition to drafting your disclosure
documents, we offer a turn key solution to these disclosure pitfalls.
Allow us to manage the production and distribution to prospective franchisees
of your disclosure materials. We will manage the updates and state-specific
disclosures and maintain records of dates of distribution and receipt
as well as maintaining signature receipts from all prospects disclosed
pursuant to your instructions. Our program will provide you with complete
electronic files of all disclosures and records of disclosure and receipts.
We provided clients
with electronic access to disclosure files on a current basis, providing
real time access to electronically imaged files combined with the knowledge
that the records are updated and accurate but without the overhead of
a paraprofessional staff in house.
We provide these
FDD production and management services either on a subscription basis
or for a per transaction charge.
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