Uniform Franchise Offering Circular in FL?

Asked almost 2 years ago - Miami, FL

In FL-Do i have to register a UFOC with Florida before selling a franchise or just provide my prospective investor with the UFOC disclosure before a contract is signed and the payment is made?

Attorney answers (4)

  1. 3

    Lawyers agree

    Answered . No, there is no registration requirement in Florida, so long as you provide the standard disclosure document package. You do, however, have to fill out a simple, one-page form each year and pay an annual fee of $200.

    One thing in your question does raise a concern. You refer to the document as the "UFOC." Although limited substantive changes were made, the "UFOC" was renamed the FDD (Franchise Disclosure Document) under a major overhaul of the Federal Trade Commission's (FTC's) 35-year-old Franchise Rule in 2007-2008. My concern is that you may be using an outdated document. If nothing else, financial statements need to be updated each year, registration state or not. If you have not had your disclosure document reviewed and updated by a franchise attorney recently and you want to be able to avail yourself of "exemption states" like Florida, you need to keep your offering documents up-to-date.

  2. 3

    Lawyers agree

    Answered . If the franchisor has a Franchise Disclosure Document (FDD) that is compliant with the FTC Franchise Rule (meaning, among other things, that it has been updated within 120 days of the end of the franchisor's fiscal year), then the franchisor is exempt from the Florida Sale of Business Opportunities Law. Most franchisors will ensure that this exemption is available by filing the Florida exemption application packet, which is available at http://www.freshfromflorida.com/onestop/forms/1..., and by paying the required $100 fee, once every year. It would be a good idea for the franchisor in your case to file this form, pay the fee, and ensure the form has been accepted, before proceeding with the disclosure and sale.

    Again, it's very important that if the franchisor is going to claim this exemption that it is in compliance with the Federal Trade Commission's Franchise Rule and its requirements, including the requirements regarding delivery and waiting periods. The exemption is not available if the franchisor is not in substantial compliance with the Franchise Rule.

  3. 1

    Lawyer agrees

    Answered . Florida does not require that your franchise offering be registered. Most franchisors will file for the exemption from the Sale of Business Opportunities Act, by submitting the one page form and paying the $100 fee. This should be done annually. This will avoid any inadvertant stumbles that would bring you under the Act.
    As mentioned, somewhat more troubling, is your reference to the UFOC. That format for disclosure was replaced by the FDD in 2008. While similar, there are notable differences, so that a UFOC disclosure document will not satisfy the FDD requirements. Also, at that time, the FTC made revisions in the manner and time for the delivery of the FDD. You would be best served to consult with an experienced franchise lawyer who can advsise you on complying with the Act, the sufficiency of your disclosure document and the delivery and timing changes that came into effect in 2008. Your question indicates that you need this advice.
    Good luck

  4. 1

    Lawyer agrees

    Answered . If you are a franchisor, federal law requires that you provide a prospective franchisee with a Franchise Disclosure Document (FDD), the successor to the UFOC, 14 calendar days prior to that prospective franchisee paying any money or signing any documents with or to you.

    You should retain experienced franchise counsel ASAP.

    This response does not create an attorney-client relationship and is not intended to provide legal advice for your... more

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