Uniform Franchise Offering Circular

Franchises in the United States are required to publish something called a Uniform Franchise Offering Circular, or a UFOC. In this document, the parent company releases information specific to the franchise. This circular can be one of the most informative steps to understanding what is involved in running a successful branch of a franchise business. In conjunction with professional advice from lawyers, bankers, and the franchisees themselves, this step can be the most revealing in the business buying process.

Some questions to consider when looking at a franchise industry include:

• What is the past performance of this franchise?
• How long has this franchise been operating?
• How large is this business as a whole?
• What kind of support system does the parent company offer for new franchisees?
• How often has this business changed hands?
• Does this franchise have a history of legal problems?
• What are the terms of the required contract?

Though a franchise is already set up and ready for the change of hands, entering into this industry is not without its risks. The prepared small business owner will do more than the minimal amount of research to discover is the franchise business model is well-suited to his or her needs, and if so, whether a particular franchise is economically viable.