The franchisor's FDD should contain two last pages that are nearly identical receipts.
After you furnish the FDD to a prospect, you must obtain from the prospect the receipt indicated to be for the franchisor, after it has been dated and signed by the prospect.
The date must be the day of disclosure, not an earlier or later date. You may help the prospect to identify or remember the day of disclosure, but the prospect, not you, must date and sign the receipt.
It is best to obtain a manually signed and dated original of the receipt, but it is acceptable to obtain a faxed or emailed copy of a signed and dated receipt, or a receipt that is electronically signed and dated.
The receipt may be returned by a means different from the means used to furnish the FDD to the prospect.
Under the FTC franchise rule, a prospect's signature may be handwritten, or may be a security code, password, electronic signature or other device authenticating the prospect's identity.
The franchisor, however, may have a policy of only accepting handwritten signatures. Check with the franchisor's lawyer or compliance manager.
If you are using an electronic FDD, the receipts must be contained within the FDD. The prospect must be required to open the entire FDD in order to locate and print the receipts.
You should encourage the prospect to date, sign and keep the other receipt indicated to be for the prospect.
(This was the seventh post in a series of 11 posts on making compliant franchise sales. )
If you would like to know if you can franchise your business, connect with me on LinkedIn and give me a call.
Leave a comment