[Code of Federal Regulations]
[Title 16, Volume 1]
[Revised as of January 1, 2006]
From the U.S. Government Printing Office via GPO Access
[CITE: 16CFR436.3]

[Page 446-447]
 
                     TITLE 16--COMMERCIAL PRACTICES
 
                   CHAPTER I--FEDERAL TRADE COMMISSION
 
PART 436_DISCLOSURE REQUIREMENTS AND PROHIBITIONS CONCERNING FRANCHISING 
AND BUSINESS OPPORTUNITY VENTURES--Table of Contents
 
Sec. 436.3  Severability.

    If any provision of this part or its application to any person, act, 
or practice is held invalid, the remainder of the part or the 
application of its provisions to any person, act, or practice shall not 
be affected thereby.

    Note 1: The Commission expresses no opinion as to the legality of 
any practice mentioned in this part. A provision for disclosure should 
not be construed as condonation or approval with respect to the matter 
required to be disclosed, nor as an indication of the Commission's 
intention not to enforce any applicable statute.
    Note 2: By taking action in this area, the Federal Trade Commission 
does not intend to annul, alter, or affect, or exempt any person subject 
to the provisions of this part from complying with the laws or 
regulations of any State, municipality, or other local government with 
respect to franchising practices, except to the extent that those laws 
or regulations are inconsistent with any provision of this part, and 
then only to the extent of the inconsistency. For the purposes of this 
part, a law or regulation of any State, municipality, or other local 
government is not inconsistent with this part if the protection such law 
or regulation affords any prospective franchisee is equal to or greater 
than that provided by this part. Examples of provisions which provide 
protection equal to or greater than that provided by this part include 
laws or regulations which require more complete record keeping by the 
franchisor or the disclosure of more complete information to the 
franchisee.
    Note 3: [As per Sec. 436.1(a)(24) of this part]:

                          Disclosure Statement

    Pursuant to 16 CFR 436.1 et seq., a Trade Regulation Rule of the 
Federal Trade Commission regarding Disclosure Requirements and 
Prohibitions Concerning Franchising and Business Opportunity Ventures, 
the following information is set forth on [name of franchisor] for your 
examination:
    1. Identifying information as to franchisor.
    2. Business experience of franchisor's directors and executive 
officers.
    3. Business experience of the franchisor.
    4. Litigation history.
    5. Bankruptcy history.
    6. Description of franchise.
    7. Initial funds required to be paid by a franchisee.
    8. Recurring funds required to be paid by a franchisee.
    9. Affiliated persons the franchisee is required or advised to do 
business with by the franchisor.
    10. Obligations to purchase.
    11. Revenues received by the franchisor in consideration of 
purchases by a franchisee.
    12. Financing arrangements.
    13. Restriction of sales.
    14. Personal participation required of the franchisee in the 
operation of the franchise.
    15. Termination, cancellation, and renewal of the franchise.
    16. Statistical information concerning the number of franchises (and 
company-owned outlets).
    17. Site selection.
    18. Training programs.
    19. Public figure involvement in the franchise.

[[Page 447]]

    20. Financial information concerning the franchisor.