Franchise Prospector » Research & Buying
Understanding the Uniform Franchise Offering Circular
The Financial Statements
The second major section of every UFOC document outlines the financial background of the franchisor and includes their complete financial statements. In fact, one of the UFOC's biggest strengths is that it delivers three years of audited financial information about the franchisor.
Item 21 of the document should include a balance sheet for the most recent fiscal year, an income statement, as well as all changes in the franchisor's financial position for the three most recent years. To guarantee their authenticity, these statements must be in the form of audited reports by a certified public accountant and they must represent what an average franchisee can realistically achieve. Financial documents are notoriously difficult to read, so always have a qualified accountant go over these figures with you.
NEXT: The Franchise Agreement
For More Information
|
