Franchise FDD Item 1: The Franchisor and Its Predecessors, Affiliates, and Certain Employees

This item provides background information about the franchisor and various entities associated with it, including predecessors, affiliates, and certain key employees.

Here are the key components typically found in Item 1:

1.1 Franchisor Information:

• Legal Name: The full legal name of the franchisor.
• Business Address: The principal business address and any other addresses used by the franchisor for official communications.

1.2 Predecessors:

• Description: Information about any companies that preceded the current franchisor. This could include the history of mergers, acquisitions, or name changes.

1.3 Affiliates:

• Description: Details about any affiliated companies related to the franchisor. Affiliates are entities that have a relationship with the franchisor, such as parent or subsidiary companies.

1.4 Certain Employees:

• Biographical Information: Background information about certain key employees, such as executives and management personnel. This may include their names, roles within the company, and relevant professional experience.

1.5 Business Experience:

• Narrative Overview: A narrative overview of the business experience of the franchisor, including its history, growth, and milestones.
• History of Changes: Any significant changes in ownership or management over the years.

1.6 Litigation Involving the Franchisor:

• Description of Litigation: Information about any past or pending litigation involving the franchisor. This includes legal proceedings related to the franchise system, business practices, or other relevant matters.
• Outcome: The outcome of resolved litigation, such as settlements or judgments.

1.7 Bankruptcy:

• Bankruptcy Filings: Disclosure of any bankruptcy filings by the franchisor. This provides insight into the financial history and stability of the franchisor.

1.8 Other Relevant Information:

• Corporate Structure: Details about the corporate structure of the franchisor, including any subsidiaries or holding companies.
• Ownership Information: Information about the ownership structure, including names and ownership percentages of major stakeholders.

Purpose:

The purpose of including this information in Item 1 is to give potential franchisees a comprehensive understanding of the franchisor’s background, business experience, key personnel, and any legal or financial issues that might impact the franchise relationship. This transparency helps franchisees assess the overall stability and reliability of the franchisor before entering into a business relationship.

It’s important for potential franchisees to carefully review this item with the assistance of legal and financial advisors to ensure a thorough understanding of the franchisor’s history and the context in which the franchise opportunity is being offered.

LINK TO FRANCHISE DISCLOSURE DOCUMENT (FDD) ITEMS WITH BRIEF EXPLANATIONS ON FranchiseFDD.com

1. Item 1: The Franchisor and Its Predecessors, Affiliates, and Certain Employees
2. Item 2: Business Experience
3. Item 3: Litigation
4. Item 4: Bankruptcy
5. Item 5: Initial Franchise Fee
6. Item 6: Other Fees
7. Item 7: Estimated Initial Investment
8. Item 8: Restrictions on Sources of Products and Services
9. Item 9: Franchisee’s Obligations
10. Item 10: Financing
11. Item 11: Franchisor’s Assistance, Advertising, Computer Systems, and Training
12. Item 12: Territory
13. Item 13: Trademarks
14. Item 14: Patents, Copyrights, and Proprietary Information
15. Item 15: Obligation to Participate in the Actual Operation of the Franchise Business
16. Item 16: Restrictions on What the Franchisee May Sell
17. Item 17: Renewal, Termination, Transfer, and Dispute Resolution
18. Item 18: Public Figures
19. Item 19: Financial Performance Representations
20. Item 20: Outlets and Franchisee Information
21. Item 21: Financial Statements
22. Item 22: Contracts
23. Item 23: Receipts

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