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1、標(biāo)題：ToFranchiseNottoFranchise原文：Since1971whenthestateofCalifniaenacteditsownstatefranchiselawmanyrulesregulationshavebeenestablishedtoregulatetheoperationdisclosureoffranchisingbusinesses.Franchisinglawshavebeendevelopedt

2、ocurbthetideofillegalfraudulentactivitiesonthepartofmanyfranchissduringthe1950s1960s.Apatchwkoflegislationemergedduringtheearlypartofthe1970swhichwasdesignedtocombattheallegedabuseswrongsoccurringinfranchisingoperations.

3、Theserulesregulationsweredesignedtorequirethefranchistodisclosebefethesaleofthefranchiseinfmationregardingtheoperationofthefranchise.On21October1979theFederalTradeCommission(FTC)establishedthefranchiseruleentitled“Disclo

4、sureRequirementsProhibitionsConcerningFranchisingBusinessOpptunityVentures“(FTCrule436).Thisrulerequiresdisclosureofspecificactivitiespritothesaleofafranchise.Thesedisclosuresmustbemadetoanyprospectivefranchiseeatthefirs

5、tpersonalmeetingbetweenthefranchis(representative)thefranchiseefthepurposeofdiscussingthefranchisesaletenbusinessdayspritotheexecutionofanyfranchisedocumentthepaymentofanyconsiderationfthefranchisewhicheveristheearlier.T

6、hisruledoesnotattempttoregulatethenaturesubstanceofthefranchissfranchiseerelationshipratheritrequiresthefranchistomakespecificdisclosuresprovideinfmationaboutfranchisingactivitiestotheprospectivefranchisee.Thisrulewasdes

7、ignedtoservetwomajfunctions:(1)preventionoffraudmisrepresentationofmaterialfacts(2)presentationofrelevantfactsinfmationtoprospectivefranchisees.Thefinalfranchisingcontractmustbedeliveredtotheprospectivefranchiseeatleastf

8、ivedayspritothedateonwhichthedocumentistobesigned.ThefranchishastheoptionofmakingthedisclosureseitheraccdingtotheFTCRulefmattheUnifmFranchiseOfferingCircular(UFOC)whichwasdevelopedbytheNthAmericanSecuritiesAdministratsAs

9、sociation.Thesefmatsmaynotbemixed.TheFTCRulecontainsonly20stepswhiletheUFOCisalittlebitlongercontains23steps.TheFTCRulefmatisacceptedinonly42stateswhiletheUFOCfmatisacceptedinall50statesaswellasintheprovinceofAlberta.fra

10、nchisitsofficersmayhavebeeninvolved.Thisdisclosurecoversactivitiesfthepasttenfiscalyears.Itwasfoundthat68percentofthecompanieswereinvolvedwithlitigationduringthattimeperiodwhile32percentwerenotOneofthereasonswhysomemayno

11、thavebeeninvolvedinlitigationwasbecausetheyhadnotbeeninbusinessverylong.Therulesalsorequirethefranchistodiscloseitsbankruptcyhistyaswellasitsdirectsofficersduringthepast15fiscalyears.Itwasfoundthat18percentoftheresponden

12、tcompanieshavebeeninvolvedinsomefmofbankruptcywhile82percenthavenot.Anotheradministrativerequirementwhichmanyfranchissrequireoffranchiseesisthelattersactualparticipationintheoperationsofthefranchise.Ofthosecompaniesrepti

13、ng33percentrequiredtheirfranchiseestoparticipatewhile67percentallowedfnoparticipationabsenteeownership.Whenafranchisoffersfinancialassistancetothefranchiseesucharrangementsmustbedisclosedinthedisclosuredocument.Themajity

14、oftherespondents55percentdidnotparticipateinprovidingfinancialsuppttotheirfranchiseeshoweveritshouldbenotedthat41percentdidprovidesomefmoffinancialassistancewhile4percentprovidedcompletefinancialsuppttotheirfranchisees.F

15、urthermeanylimitationregardingtheterritialgeographicalareasinwhichafranchiseemayoperatemustbedisclosedunderthelaw.Itwasfoundthat69percentoftherespondentsprovidedterritialrightsguaranteestotheirfranchiseeswhile31percentdi

16、dnot.Whenafranchiseeisgrantedanexclusiveterritytooperateawrittendeionoftheterritialrestrictionsboundariesmustalsobeprovided.Thecircumstancesgoverningthemaintenanceofsuchexclusiveterritialrightssuchasmeetingcertainsalesgo

17、alsmustalsobestated.Manyfranchissrequiretheirfranchiseestopurchasegoodsequipmentfromapprovedsuppliersspecificsources.Ifthisisthecasethefranchisisrequiredtodescribethesegoodsservicesexplaintothefranchiseewhetherthefranchi

18、sisaffiliatedwithanyofthesebusinesses.Thestudyrevealedthatfranchiseeswererequiredtopurchasefromapprovedsuppliersapproximately90percentofthetime.Afranchismustdisclosetheamountmethodofpaymenttimeofpaymentrefundabilityofthe

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