Before a franchisee signs a contract, the U.S. Federal Trade Commission regulates the disclosure of information under the control of the franchise rule.  The franchise rule requires that a Disclosure Document (FDD) franchise be made available to a franchisee (originally a uniform offer circular (UFOC) franchise prior to the signing of a franchise agreement, at least fourteen days before signing a franchise agreement.  A franchisor must reveal the context of the company – including the experience of its senior executives – for the past five years; and whether, in the last seven years, one of its officers has been convicted of a crime, convicted of fraud, tried for fraud in a civil action, has been held responsible for a fraud case, has been subject to a currently effective judicial injunction or an administrative agency judgment on the franchise, or has been subject to insolvency or insolvency proceedings over the past seven years. Point 19: the section of the franchise publication document that a franchisor can use to disclose rights to existing franchisees and business sites. Note that this data does not constitute a mandatory registration in the FDD and that the data provided may only represent a particular group of franchisees and/or franchisees. Always read the fine print to understand where the numbers come from, especially when comparing the claims of several brands on Section 19. Territorial delegate: a franchisee who also acts as a seller for the franchisor in a given territory. The territory representative identifies new franchisees, but the franchise agreement itself and the exchange of funds are made between the new franchisee and the company. The representative of the territory can then receive a commission from the franchisor.
Transfer: Ownership of a franchised business is transferred from one party to another. As part of the most common working method, the cornerstone of a franchise system must be a trademark or trade name of a product. A franchise is a license of an owner of a trademark or business name that allows another to sell a product or service under the name or brand.