ublicly traded franchisors consider

ublicly traded franchisors considering a merger, an
acquisition, or being acquired confront significant disclosure obligations imposed by franchise disclosure
laws and securities laws at both the federal and state levels.
These laws establish a panoply of requirements and prohibitions that must be applied on a case-by-case basis to
determine: (1) what the merging/acquiring/acquired franchisor may disclose, must disclose, and can refrain from
disclosing; (2) when such disclosures must be updated; and
(3) at what stage of the negotiations such disclosure may or
must be made.
This article considers these and other questions from both
the franchise law and securities law perspectives, and offers
some practical suggestions to avoid running afoul of the
many applicable requirements and prohibitions.
Disclosure Under the Franchise Laws
No franchise may legally be offered or sold in this country
without the prior dissemination to prospective franchisees of
a prospectus-type document as mandated by the nonpreemptive Federal Trade Commission franchise rule' and the franchise registration/disclosure laws of fourteen states.
2
Although the FTC franchise rule features its own disclosure
format, it also permits use of the state-ordained disclosure
document, the Uniform Franchise Offering Circular (UFOC).
Virtually every franchisor nationwide utilizes the UFOC document to fulfill its presale disclosure obligations.
The contents of a franchisor's UFOC are dictated by the
UFOC guidelines,
3
as promulgated by the North American
Securities Administrators Association (NASAA) and as
adopted by the franchise-regulating states through reference
or incorporation in statutes, regulations, or both. But the
UFOC guidelines should only be viewed as prescribing the
inner limits of a franchisor's disclosure obligations, not the
outer limits. Both the FTC franchise rule and the state disclosure requirements impose on franchisors a significant
"materiality" standard of disclosure, a standard that must be
referenced when exploring the "outer limits" of a franchisor's disclosure obligations and that securities practitioners will find familiar from its direct predecessor, Rule lOb-5
of the Securities and Exchange Commission. The FTC franchise rule defines the terms "material" and "material
(continued on page 40)

ผลลัพธ์ (อังกฤษ) 3:

Ublicly traded franchisors considering, a merger an
acquisition or being, acquired confront significant disclosure obligations. Imposed by franchise disclosure
laws and securities laws at both the federal and state levels.
These laws establish a panoply. Of requirements and prohibitions that must be applied on a case-by-case basis to
determine:(1) what the merging / acquiring / acquired franchisor may disclose must disclose, and can, refrain from
disclosing; (2 when.) Such disclosures must be updated; and
(3) at what stage of the negotiations such disclosure may or
must be made.
This article. Considers these and other questions from both
the franchise law and securities, law perspectives and offers
.Some practical suggestions to avoid running afoul of the
many applicable requirements and prohibitions.
Disclosure Under. The Franchise Laws
No franchise may legally be offered or sold in this country
without the prior dissemination to prospective. Franchisees of
.A prospectus-type document as mandated by the nonpreemptive Federal Trade Commission franchise rule 'and the franchise. Registration / disclosure laws of fourteen states.

Although 2 the FTC franchise rule features its own disclosure
format it,, Also permits use of the state-ordained disclosure
document the Uniform, Franchise Offering Circular (UFOC).
.Virtually every franchisor nationwide utilizes the UFOC document to fulfill its presale disclosure obligations.
The contents. Of a franchisor 's UFOC are dictated by the


, UFOC guidelines 3 as promulgated by the North American
Securities Administrators. Association (NASAA) and as
adopted by the franchise-regulating states through reference
or incorporation in statutes regulations,,, Or both. But the
.UFOC guidelines should only be viewed as prescribing the
inner limits of a franchisor 's, disclosure obligations not the
outer. Limits. Both the FTC franchise rule and the state disclosure requirements impose on franchisors a significant
"materiality". Standard of disclosure a standard, that must be
.Referenced when exploring the "outer limits" of a franchisor 's disclosure obligations and that securities practitioners. Will find familiar from its, direct predecessor Rule lOb-5
of the Securities and Exchange Commission. The FTC franchise. Rule defines the terms "material" and "material
(continued on page 40).