Franchise FDD Item 18: Public Figures

Item 18 of the FDD provides information about any public figures associated with the franchise system, including celebrities or well-known individuals. This item is crucial for potential franchisees as it discloses the involvement of public figures in the franchisor’s business.

Here are the key components typically found in Item 18:

18.1 Identification of Public Figures:

• List of Public Figures: A listing of any public figures, celebrities, or well-known individuals associated with the franchise system. This may include their names, roles, and contributions.

18.2 Involvement of Public Figures:

• Nature of Involvement: Information about the nature and extent of the involvement of public figures in the franchise system. This could range from endorsements to actual ownership or management roles.

18.3 Compensation to Public Figures:

• Compensation Arrangements: Disclosure of any compensation arrangements or benefits provided to public figures for their involvement with the franchise system.

18.4 Comparative Information:

• Comparative Information: In some cases, the FDD may include a table comparing the use of public figures with those of other franchise systems within the same industry.

Purpose:

The purpose of Item 18 is to provide potential franchisees with transparency regarding the presence and involvement of public figures in the franchise system. This information is important for franchisees to assess the potential impact of celebrity endorsements or associations on the brand and their own business.

Tips for Potential Franchisees:

• Evaluate Impact: Assess the potential impact of having public figures associated with the franchise system on the brand’s reputation and market appeal.
• Understand Involvement: Understand the nature and extent of the involvement of public figures, whether it is in promotional activities, management roles, or ownership.
• Review Compensation Arrangements: Review any compensation arrangements or benefits provided to public figures and consider how it may affect the franchise system.
• Inquire About Comparative Information: If available, inquire about how the use of public figures compares with other franchise systems in the same industry.

By thoroughly examining Item 18, potential franchisees can gain insights into the use of public figures in the franchise system and evaluate how this association may impact the brand’s image and market presence. Understanding the nature of their involvement and any compensation arrangements is crucial for franchisees to make informed decisions about entering into a franchise agreement.

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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