Article On Business Expereince Of Ufoc
UFOC sections on Business experience and bankruptcy
Business experience:
In this section of the UFOC will be the various business experiences of the major players in the corporate office. These include directors, trustees and general partners. Additionally well-known officers and other executives or subfranchisors with management responsibility. Each person should have principal occupation and employers for last five years. Principal Officers include the chief executive and chief operating officer, the president, financial, franchise marketing, training and franchise operations officers.
It’s important that as a prospective franchisee you enter a system which is successful. A large part of this success will be down to the experience of the people at the corporate office. This section of the UFOC will give a brief synopsis of each of the major corporate people outlining their individual experience. When buying into a franchise also look at when they began franchising. General business experience is good, but specific franchise experience is very important. The UFOC may not always demonstrate this so always remember to check when a company began franchising. Be very wary of any real new system as there may be a lot of problems with it.
According to Franchising 101 there are a number of things to consider when looking at this section of the UFOC.
• What level of experience do the franchisor’s personnel have in franchising?
• How experienced are they in the industry?
• What is the support network like?
• Is the franchise system built around the founder?
• Try and regain ways to check out business experience prior to those initial five years?
• Independently research the franchise, don’t unprejudiced remove their word for it.
These are all important points to consider when thinking about which system is best for you. As I have previously mentioned its vital the company has a good number of years in franchising. Also make efforts to ensure there are personnel on the fresh staff who have franchising experience. Remember that once you are in the franchise system you will still need plenty of support. Firstly it is vital that there are personnel that have specific industry experience. Doing your research now will save you a lot of headaches later on and if possible you will want a system that has direct access to the right people. Closely research the type of succor that is available. At the start of this venture you will need all the support you can rep. Does the system have an extensive training program, site selection assistance and help with financing. Also is there a clear place to go for help and what is the network like with other franchisees. Have a steady discontinuance look at how the system is setup is the founder the main person. The better systems will have multiple people to talk to all having experience and useful information. A system that relies on the founder is a jam because what if they are sick, leave or go out of town. One of the limiting factors of UFOC is information on business experience is only for the last five years. If possible try and find out the experience prior to this, there may be a dark past they are not required to report. Get information on the franchise from as many different sources as possible. It is fairly obvious to state that the franchisor will say how fabulous their system is after all they are trying to sell it to you. For this reason catch feedback from franchisees in the system. Look at all sources such as complaints filed against them and general reviews of the system. If possible get the franchise system independently assessed.
Samples:
It is important to remember that as with the rules of the UFOC the franchisor is only required to reveal the last five years of business experience. Although most UFOC give some indication towards previous experience.
Sample from Jazzercise:
President and Director: Judi Sheppard Missett
Professional dancer and model; Founder and instructor of Jazzercise Dance Fitness Program since 1969; member of California Association of Health, Physical Education and Recreation; Member of American Federation of Television and Radio Artists and Actors’ Equity; named as one of the outstanding women in the Southwestern United States; Inducted into the National Association for Sport and Physical Education (NASPE) Hall of Fame (2002) ; Received the “Entrepreneur of the Year Award” from the National Foundation for Women Legislators, Business Women’s Network, and the Runt Business Administration (2000) ; President, Director and sole shareholder of Jazzercise since 1979.
Information taken from Jazzercise UFOC via California Department of Corporations website.
Information taken from Curves International UFOC via California Department of Corporations website.
Sample of business experience from Lite for Life:
“Christopher P. Bruno has been President of Lite for Life Franchising Corporation, Inc. Since the inception of the corporate entity on April 7, 2003. Most recently he was Vice President, Sales, at Full Degree in Palo Alto, CA. Prior to that Chris worked as sales consultant in high technology in San Francisco, CA and was Director of Sales at Scient Corp from May of 1999 to December of 2001. For the three years prior to that Chris ran and consulted to his occupy company, CTI Solutions, in San Francisco, CA. Chris opened his first weight loss center in Santa Barbara, CA in 1983. He has a BA in English from Santa Clara University.”
Sample of business experience from Granite Transformation of Chief Operating Officer And Secretery: Mark J. Johnson:
“Mark J. Johnson has been our General Manager since September 3, 2001 and Chief Operating Officer and Corporate Secretary since October 23 2001. Prior to September 3, 2001, he was co-owner of a retail specialty shop called “The Ruffled Tullip” located and operated in Tustin, California. He held the position of Director of Operations, General Manager –Training Store and Store Opening Coordinator for Great Earth Companies, Inc. Operating out of Rancho Cucamonga, California from June 1996 to November, 2000.”
The above samples are from Franchise Bible.
Bankruptcy:
This section of the UFOC gives you some very important information on the financial affairs. The franchisor must disclose bankruptcy issues involving itself, its affiliates, its predecessors and its officers or general partners that occurred within ten years of the UFOC. It is important to heed that directors and other executives do not have to disclose bankruptcy though-provoking them. It is also worth noting that not every type of bankruptcy needs to be disclosed. If it does need to be disclosed then the information required is name of the person/company that was debtor, the date of the action and the material facts.
Bankruptcy may not be the disaster that it use to be, but it is collected something that you should possess in mind. The franchisor may have disaster growing and expanding the business because of trouble with financing and loans. Things to consider:
• Find out how relevant the bankruptcy is to the business operation.
• Determine the precise reasons for the bankruptcy.
It is important to know why the franchisor may have had to file bankruptcy and how this may affect you as a potential franchisee. Also be very wary of companies that have got it hopelessly wrong in the past and that is the reason for their bankruptcy. For instance a franchisor that grew too speedily, lacked cash or entered the wrong market. Also a franchisor that made this kind of mistakes are not likely to give you the best advice. Remember that the best indication of future performance is past performance. For this reason be wary of franchisors that have failed using other systems, although there are exceptions.
Samples:
As you can imagine most current franchisors do not have anything to disclose in this section. As stated previously it is highly unlikely that someone that at one point declared bankruptcy will go on to rousing success. Lite For Life expend the standard acknowledge to nothing to divulge in the bankruptcy section:
“No person previously identified in items 1 or 2 of this offering circular has been involved as a debtor in proceedings under the U.S Bankruptcy code required to be disclosed in this item.”
Granite Transformations acknowledge in this section is lengthier, but it almost seems that they are dodging the question with use of specific time frames. I would certainly like to investigate their situation further. Nonetheless their acknowledge to the question is as follows:
“Neither the franchisor or any predecessor, officer or general partner of the Franchisor during the preceding 10 (ten) year period is currently or has been the subject of any bankruptcy proceeding, either under U.S Bankruptcy Code or under the laws of foreign nations relating to bankruptcy proceedings, or was the famous officer of any company or general partner in any partnership that is currently or was the subject of any bankruptcy proceeding, either under U.S Bankruptcy Code or under the laws of foreign nations relating to Bankruptcy proceeding, during or within one year after the person held such a place.”
According to the franchise bible a sample of bankruptcy declaration would be as follows:
“Belmont’s present president, Roger Rowe, was president of Acme Muffler Service, Inc., a Houston, Texas based manufacturer of exhaust systems, from July 1, 1978, through June 14, 1983. On June 6, 1983, an involuntary petition under the U.S. Bankruptcy code was filed against Acme by its creditors. On July 14, 1983, the court entered an order of relief. Acme sold its assets and was dissolved.”
Work Cited
Ann Dugan “Franchising 101” 1998
Thomas Seid “Franchising for Dummies” 2000
Erwin J. Keup “Franchise Bible” 2004
California Department of Corporations (http://134.186.208.228/caleasi/Pub/Exsearch.htm)
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Filed under Declare Bankruptcy Student Loans by on Dec 5th, 2011. 