Home -> Law Blog Directory -> International Law Blogs -> Misleading Advertising Law

International Law

: Misleading Advertising Law

Franchise Tip from Michael Seid

Michael Seid has an interesting tip over at Franchise-Chat.com, on how to Evaluate a Franchisor's Services

How do you evaluate the franchisor's support?

"Franchisors want to put their best foot forward when talking with a prospective franchisee. They know you?re evaluating them as much as they?re evaluating you, so you?re wise to investigate.

There are several ways to evaluate a franchise?s support program:

Check Item 11 [in the UFOC] - Franchisor?s Obligations - of the Uniform Franchise Offering Circular. This item lists the support the franchisor is contractually promising to provide to franchisees. Keep in mind that what?s listed in the UFOC is the minimum amount of support they promise to provide.

For example, if the UFOC states you will receive new advertising materials for local advertising annually, but the franchise?s advertising representative told you they?re sending new materials twice a year or even quarterly, there may not be a disconnect. They may be doing more than they promised. Still, you should dig a little deeper in your research to be certain."

Well, let's take a look at an item 11 - the new Tasti D-Lite franchise system.

In item 11, Tasti D-Lite says that it obliged under the contract to only provide the franchise with the following.

Before:

1. Site selection.
2. Lending the franchise the operations manual.
3. Specification of equipment, supplies and services.
4. Design and sign specifications for the store.
5. Assistance with site selection.
6. Assistance with lease negotiation.
7. Advice concerning constructions.

During Operation:

1. At their option, hold conferences.
2. Update the manuals.
3. Provide "periodic" assistance by telephone, email, etc.
4. Training, at cost, for your new managers.
5. Review proposed equipment, supplies, and services to see if they meet the Tasti-D-Lite specifications.
6. Administer the ad fund.
7. At their option, provide intranet access to certain materials.
8. Maintain a website.
9. Produce new marketing materials.

There is very little content to these obligations. Once you have signed this franchise agreement, what you can expect from your franchisor on a contractual basis is very little.

But great advice by Michael Seid directing us to look carefully at Item 11.

Full post as published by Misleading Advertising Law on February 25, 2008 (boomark / email).