Below is a sample franchisee questionnaire that I recommend be included as an exhibit in each FDD I prepare. In the event of a problem with the franchisee in the future, it is a powerful document for a franchisor to have, where the franchisee essentially stated at the time of sale that everything told by the franchisor to the franchisee during the sales process was included in the FDD. In other words, no oral promises, representations or statements were made by the franchisor that did not mirror the FDD.
[SAMPLE]
FRANCHISEE DISCLOSURE QUESTIONNAIRE
As you know, _____________ “Franchisor” and you are preparing to enter into a Franchise Agreement for the operation of a Franchised Business. In this Franchisee Disclosure Questionnaire, Franchisor will be referred to as “we” or “us.” The purpose of this Questionnaire is to determine whether any statements or promises were made to you that we did not authorize and that may be untrue, inaccurate or misleading. Please review each of the following questions carefully and provide honest and complete responses to each question.
1. Have you received and personally reviewed the Franchisor’s Franchise Agreement and each exhibit, addendum and schedule attached to it?
Yes No
2. Do you understand all of the information contained in the Franchise Agreement and each exhibit and schedule attached to it?
Yes No
If “No”, what parts of the Franchise Agreement do you not understand? (Attach additional pages, if necessary.)
3. Have you received and personally reviewed our Franchise Disclosure Document we provided to you?
Yes No
4. Do you understand all of the information contained in the Franchise Disclosure Document?
Yes No
If “No”, what parts of the Franchise Disclosure Document do you not understand? (Attach additional pages, if necessary.)
5. Have you discussed the benefits and risks of operating a Franchised Business with an attorney, accountant or other professional advisor and do you understand those risks?
Yes No
6. Do you understand that the success or failure of your business will depend in large part upon your skills and abilities, competition from other businesses, interest rates, inflation, labor and supply costs, lease terms and other economic and business factors?
Yes No
7. Has any employee or other person speaking on our behalf made any statement or promise concerning the revenues, profits or operating costs of a Franchised Business that we or our franchisees operate?
Yes No
8. Has any employee or other person speaking on our behalf made any statement or promise concerning a Franchised Business that is contrary to, or different from, the information contained in the Franchise Disclosure Document?
Yes No
9. Has any employee or other person speaking on our behalf made any statement or promise concerning the likelihood of success that you should or might expect to achieve from operating a Franchised Business?
Yes No
10. Has any employee or other person speaking on our behalf made any statement, promise or agreement concerning the advertising, marketing, training, support service or assistance that we will furnish to you that is contrary to, or different from, the information contained in the Franchise Disclosure Document?
Yes No
11. If you have answered “Yes” to any of questions seven (7) through ten (10), please provide a full explanation of your answer in the following blank lines. (Attach additional pages, if necessary, and refer to them below.) If you have answered “No” to each of such questions, please leave the following lines blank.
12. Do you understand that in all dealings with you, our officers, directors, employees and agents act only in a representative capacity and not in an individual capacity and such dealings are solely between you and us?
Yes No
Raymond McKenzie is a corporate and franchise attorney in the Washington, D.C. metropolitan area.
Subscribe in an RSS reader
