We are pleased to provide you with the MSA 2007 Franchise Disclosure Compliance Calendar. We hope you will find this to be a convenient reference to calculate the disclosure timing requirements mandated by FTC regulations and various state laws.
FTC 10 Business Day Rule
FTC regulations require that you distribute a complete franchise offering circular with exhibits to all prospective franchisees on a date that is the earlier of either the first face-to-face meeting or on a date that is not less than 10 "business days" prior to the signing of any agreement or the acceptance of any money. Note that it is a requirement that you deliver all of the relevant agreements and documents with the UFOC. The first face-to-face meeting means the first time you talk to a prospective franchisee about buying a franchise.
FTC 5 Business Day Rule
In addition to the 10 Business Day Rule, the FTC also requires that no less than 5 "business days" prior to the signing of any agreement or the acceptance of any money that you deliver to a prospective franchisee a completed copy of all agreements and related documents to be signed by the franchisee. You must deliver a completed "ready to be signed", set of documents to a prospective franchisee not less than 5 business days before you can accept any check or signed agreement. If any state's holiday occurs within the 10-day period or 5-day period, add the appropriate number of days to the disclosure period for sales in that state.
Note: The Federal Trade Commission has proposed a change in the waiting period from business days to fixed calendar day waiting periods. The change has not become effective as of January 1, 2007.
Weekends and Holidays Excluded
For purposes of counting "business days", all Saturdays, Sundays and holidays are excluded. Federal holidays - January 1 (New Year's Day), January 15 (Martin Luther King, Jr. Day, February 19 (President's Day), May 28 (Memorial Day), July 4 (Independence Day), September 3 (Labor Day), October 8 (Columbus Day), November 11 (Veteran's Day**), November 22 (Thanksgiving Day) and December 25 (Christmas) - are excluded everywhere.
**November 11th, 2007 is the legal public holiday for Veterans Day. While many government offices and businesses will be closed on the 12th, for the purpose of this calendar we are using the 11th for Veterans Day. These federal holidays are noted on the calendar, and the effect of these holidays has been taken into consideration. Please note that we have not taken into consideration the effect of state holidays. Certain state holiday dates will be excluded for purposed of calculating "business days" for proposed sales in those states. You will need to do this in the appropriate situations.
Please note: Jewish and Islamic holidays begin sundown the evening before the indicated date. Islamic and Chinese New Year may vary.
Calculation Method
In calculating the appropriate time period (whether under the 10 Business Day Rule or the 5 Business Day Rule), you may not count either the day the franchise offering circular is delivered or the day on which the agreement is signed or money is received. In other words, there must be an intervening period that includes ten business days in which no activity occurs. You will note in reviewing the calendar that we have taken this method of calculation into consideration.
The calendar is designed to let you know the first day that you can close a transaction if you complied with that applicable rule as of that date. We hope that you will find this calendar to be a useful tool throughout the year. You should always verify the calculation prior to use.
Click here to view the complete 2007 calendar.
Copyright Michael H. Seid & Associates LLC 2002-2005
94 Mohegan Drive, West Hartford, CT 06117
www.msaworldwide.com
(860) 523-4257
FTC 10 Business Day Rule
FTC regulations require that you distribute a complete franchise offering circular with exhibits to all prospective franchisees on a date that is the earlier of either the first face-to-face meeting or on a date that is not less than 10 "business days" prior to the signing of any agreement or the acceptance of any money. Note that it is a requirement that you deliver all of the relevant agreements and documents with the UFOC. The first face-to-face meeting means the first time you talk to a prospective franchisee about buying a franchise.
FTC 5 Business Day Rule
In addition to the 10 Business Day Rule, the FTC also requires that no less than 5 "business days" prior to the signing of any agreement or the acceptance of any money that you deliver to a prospective franchisee a completed copy of all agreements and related documents to be signed by the franchisee. You must deliver a completed "ready to be signed", set of documents to a prospective franchisee not less than 5 business days before you can accept any check or signed agreement. If any state's holiday occurs within the 10-day period or 5-day period, add the appropriate number of days to the disclosure period for sales in that state.
Note: The Federal Trade Commission has proposed a change in the waiting period from business days to fixed calendar day waiting periods. The change has not become effective as of January 1, 2007.
Weekends and Holidays Excluded
For purposes of counting "business days", all Saturdays, Sundays and holidays are excluded. Federal holidays - January 1 (New Year's Day), January 15 (Martin Luther King, Jr. Day, February 19 (President's Day), May 28 (Memorial Day), July 4 (Independence Day), September 3 (Labor Day), October 8 (Columbus Day), November 11 (Veteran's Day**), November 22 (Thanksgiving Day) and December 25 (Christmas) - are excluded everywhere.
**November 11th, 2007 is the legal public holiday for Veterans Day. While many government offices and businesses will be closed on the 12th, for the purpose of this calendar we are using the 11th for Veterans Day. These federal holidays are noted on the calendar, and the effect of these holidays has been taken into consideration. Please note that we have not taken into consideration the effect of state holidays. Certain state holiday dates will be excluded for purposed of calculating "business days" for proposed sales in those states. You will need to do this in the appropriate situations.
Please note: Jewish and Islamic holidays begin sundown the evening before the indicated date. Islamic and Chinese New Year may vary.
Calculation Method
In calculating the appropriate time period (whether under the 10 Business Day Rule or the 5 Business Day Rule), you may not count either the day the franchise offering circular is delivered or the day on which the agreement is signed or money is received. In other words, there must be an intervening period that includes ten business days in which no activity occurs. You will note in reviewing the calendar that we have taken this method of calculation into consideration.
The calendar is designed to let you know the first day that you can close a transaction if you complied with that applicable rule as of that date. We hope that you will find this calendar to be a useful tool throughout the year. You should always verify the calculation prior to use.
Click here to view the complete 2007 calendar.
Copyright Michael H. Seid & Associates LLC 2002-2005
94 Mohegan Drive, West Hartford, CT 06117
www.msaworldwide.com
(860) 523-4257
Labels: Franchise Opportunity
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