Franchisor selling franchise

... By Liz Dillon from Gray Plant Mooty Only english version available (Spanish version translated by Josan Garcia in process) Federal franchising laws in the U.S. prohibit a franchisor from selling a franchise to a prospective franchisee before complying with certain disclosure requirements. All franchisors offering and selling franchises in the U.S. had to convert their old disclosure documents to the new franchise disclosure document or FDD format required under the Amended Rule by July 1, 2008. The Amended Rule also requires the franchisor to disclose information about the franchise agreement and the franchise relationship, including obligations of both the franchisee and the franchisor, fees paid, territory restrictions, financing and trademarks licensed. Most importantly, the Amended Rule requires a franchisor to disclose annually in Item 3 all franchisor-initiated litigation involving the franchise relationship filed during the previous fiscal year. ...