Complying with Federal Regulations for Franchises
You have operated one of your property sites as a prototype for the franchise operation. The properties are all in upscale locations that support the restaurant’s thematic dessert profile. This new site has test-marketed the franchise concept with the patented dessert brand, “Brain Freeze,” that savory specialty formulated dessert treat created by Sally. The dessert has become so popular that many customers have requested extra take-home orders. A substantial number of patrons have even asked if the dessert would ever be sold separately in markets. The dessert menu has a strong sales position in overall restaurant sales and generated a cash flow that supported the entire overhead of the test model. Your company is now ready to launch the franchise operation, but you must first complete this assignment.
This assignment is a blue font exercise; make sure you complete the document using a readable Blue Font. Assemble the documents required to establish a national franchise operation.
Review the Partial FDD Information (PDF)
Download Partial FDD Information (PDF)that outlines the partial franchise requirements that legally permit your company to sell and enter into franchise agreements with franchisees.
This document outlines your franchise profile.
Compare the Partial Franchise Disclosure Document information using the statutory specifications found in Part 436 – Disclosure Requirements and Prohibitions Concerning Franchising (Electronic Code of Federal Regulations). (Links to an external site.)
Specifically, look at:
Subpart B—Franchisors’ Obligations
Subpart C—Contents of a Disclosure Document
Ensure all statutory requirements are in the PFDD document any missing sections highlighting any deficiencies or variations from the Statute.
Next, complete and revise the following agreement: FDD Franchise Agreement (DOCX). Download FDD Franchise Agreement (DOCX).
Complete all blanks “___” or bracketed “[ ]” sections with the appropriate information using Blue Font and provide any other missing terms required to solicit prospective franchisees. Make sure the agreement terms are consistent with the statutory requirements.
Use your responses to questions in the Franchise Agreement Checklist completed in Assignment 9.3 to assist in completing 9.4.
This assignment requires you to demonstrate your understanding and ability to redraft an agreement and compliance with the legal provisions that meet your company’s franchise requirements and comply with the statutory franchise legal requirements.
You are permitted to create “best judgment” responses using the Case Study as support for information not directly provided.
Compare the Partial Franchise Disclosure Document information using the statutory specifications found in Part 436 – Disclosure Requirements and Prohibitions Concerning Franchising (Electronic Code of Federal Regulations).
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