to form an illegal representation.
The fact is that, along the way, information comes from many sources, and as
a practical matter you are counting on the
franchise candidates to separate what they
learned from you from the information
they learned from your existing franchisees. If you have a written representation containing this information, then
there is an active barometer against which
to measure the information obtained from
within or from outside of the organization.
ITEM
19
Who Discloses, Who Doesn’t
Supplemental FPRs
If a franchisor makes a compliant
FPR in its Franchise Disclosure Document (FDD), then it may also make a
supplemental FPR about a particular
geographic location or apart from the
FDD, so long as the supplemental FPR
is: 1) in writing; 2) explains any departure
from the FPR in the FDD; 3) is prepared
in accordance with the requirements of
the Amended FTC Rule; and 4) is furnished to the prospective franchisee.
As long as the FPR contains the same
data points for the control group presented, a franchisor can prepare a supplemental claim showing the compiled
results of certain subsets, including by
way of example: units near schools or
public transportation; units with outside
salespeople; units within a particular
region; units with a particular-sized territory, a certain number of trucks, or a
certain volume of business; units offering a particular product or service; units
offering a particular service or utilizing
certain equipment; units of particular size,
shape, dimensions, or building type, or
those with drive-thrus; units owned by
multi-unit operators; units in unique
co-branded pairing combinations; or
units operated by a like ethnicity, a particular educational level, or by those
who have served in the military. Supplemental FPRs may also help a franchisor to define its target market, such
that the general FPR can be tailored in
the future to exploit areas that represent
the highest potential for growth.
These companies
DO
These companies
DON’T
Retail ————————————————————————————
Color Me Mine
Shorelines Gallery
ColorTyme
1st Propane
Nationwide Lifts
Bilsten’s Appliance Outlet
Radio Shack/ASC
Health Mart Pharmacies
Card$Mart Card & Gift Shop
Tile Outlet Always in Stock
1-800-Mattress
Assist 2 Auction
Food ————————————————————————————
Rib City Grill
Bruegger’s
Bojangles’ Famous Chicken ‘n’ Biscuits
Wingman Wings
Water 2 Wine
Dale and Thomas Popcorn
Wateria
The Great American Bagel
Buffalo Wings & Rings
KFC
Bajio Mexican Grill
Yogurt Queen
Carrows Restaurants
Lodging ———————————————————————————
Clarion Hotels, Inns, Suites, Resorts
Comfort Inn, Suites, and Hotels
Red Roof Inn
Sheraton Hotels, Resorts, Suites
Studio 6 Extended Stay Hotel
Wingate Inns/Wingate Inns & Suites
America’s Best Inns & Suites
Clubhouse Inn/Inn and Suites
Park Inn/Park Inn Suites/Park Inn & Suites
The Waldorf=Astoria Collection
Shilo Inns Suites Hotels
Scottish/Red Carpet/Master Hosts/
Passport Inns
Business Services ——————————————————————
FPRs as a defensive strategy
Most often, franchisors don’t make
FPRs for fear of liability to a prospect who
continued on page 54
Crestcom International
Proshred Security
MRI Management Recruiters/
MRI Sales Consultants
Proforma
Sparkle Wash International
EWF International
ServCorp International
Sanford Rose Associates
PRstore
Expense Reduction Analysts
Intelligent Office System
The Entrepreneur’s Source
