The UFOC, that document beloved by Franchisor and Franchisee alike, is adapting to the 21st century. Strictly, it’s the FTC’s Franchise Rule, originally promulgated in 1978, that has been updated, effective in July 2007. Clearly technology has changed dramatically in the last 29 years, and the revised rule at last takes into account what has become commonplace – namely web downloading, email and data CDs.

With careful attention to legal requirements, distribution of the UFOC on CD has been an option for a number of years, but the revised rule now makes it clear that electronic distribution is equivalent to paper and offers a number of options. It does so by defining written material as any document or information in any form capable of being preserved in tangible form and read, and specifically refers to CD-ROM and email.

For several years now, CDWorks has created CDs containing the UFOC and associated documents for a major hotel franchisor with multiple brands. The documents are in PDF format and, in order to comply with FTC guidelines, the user is forced to view a series of introductory screens with mandatory disclosures before reaching a main menu and table of contents. Acrobat navigation and menus are removed from the user’s control until the disclosures are read and the user accepts the franchisor’s terms for viewing the documents. After that, the user is presented with a menu of options – to view the UFOC; access a linked Table of Contents and fill in a franchise license application on the computer.

 

The CD has many advantages over the printed document. For the prospective franchisee, it is far more convenient than a bulky paper document. It can be easily carried or stored – and, for example, viewed on a laptop when traveling. It also encompasses the printed documents, since those can be printed out as necessary – but only the parts relevant to the user at any point need be printed. More importantly, all the information is quickly accessible through links or searching – no more leafing through hundreds of pages to find a relevant clause.

For the franchisor, it is significantly less expensive to produce and distribute. The FTC estimates that franchisors printing 100 disclosure documents will pay $35 each for printing and mailing. However, they estimate that documents distributed electronically will cost merely $5 per disclosure – clearly a huge saving. In addition, it can be quickly and easily updated and can be linked to the franchisor’s website and online resources.

All franchisors may furnish disclosures using the approach that is most economical for their business, so CD distribution will be of significant benefit to large and small franchisors alike.

NEFA Member CDWorks is a recordable media duplicating company in Boston, MA. For further information, contact Jeffrey Starfield at jbs@cdworks.com or call (800)-CDWORKS.

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