Originally Published 1st July 2009

By 31 October 2009 franchisors must update their disclosure document to ensure that they reflect information current at a date which is between 1 July 2009 and 31 October 2009.

Most systems will need to consider issues, including the following:

  • whether the franchisor's (and its related entity's) details are the same
  • whether the officers of the franchisor changed, and if so, what is the business experience of the new officers
  • whether the franchisor, or directors of the franchisor, have been involved in any litigation, and if so, the details of that litigation
  • whether changes have occurred to the number of existing franchised businesses, existing franchisees and company operated businesses
  • general information regarding current franchisees (such as their address, phone number) will need to be updated and information regarding franchisees that have exited the system in the last year added
  • the franchisor will need to identify and give details of transfers, businesses that ceased to operate, franchise agreements that were terminated (by the franchisee and the franchisor), franchise agreements that were not renewed upon expiry, franchised businesses that were bought back by the franchisor and, franchise agreements that were terminated and the franchised business was acquired by the franchisor
  • whether the franchisor now receives rebates from any new suppliers, and if so, whether those rebates are not shared, shared indirectly or shared directly with franchisees
  • whether the price or price range given in the payments section are still relevant and appropriate
  • whether the franchisor is solvent.

Please contact Middletons with any queries regarding the update of your disclosure document.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.