Did you know that last May (2019) that NASAA adopted new state cover sheets and state effective dates page for franchise disclosure documents. Beginning January 1, 2020, any FDD must now include three new cover sheets following the guidelines provided by NASAA.
The U.S. Small Business Administration created the SBA Franchise Directory to try and streamline the process for entrepreneurs looking to access capital.
According to SBA Associate Administrator Willam Manger, “It’s a one stop shop to check the growing list of eligible brands for SBA financing. Since its establishment, the Directory and new procedures have received extremely positive feedback from the stakeholders participating in the process."
More specifically, the Franchise Rule gives prospective purchasers of franchises the material information they need in order to weigh the risks and benefits of such an investment. The Rule, primarily enforced by the Federal Trade Commission ("FTC") at the federal level, requires franchisors to provide all potential franchisees with a disclosure document (commonly known as the "FDD") containing 23 specific items of information about the offered franchise, its officers, and other franchisees.
If you’re considering buying your own franchise, you probably have tons of questions running around in your mind; questions that can make the difference in success, or failure, of reaching your business goals.