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16 C.F.R. § 436.3   Severability.

Title 16 - Commercial Practices

Title 16: Commercial Practices
PART 436—DISCLOSURE REQUIREMENTS AND PROHIBITIONS CONCERNING FRANCHISING AND BUSINESS OPPORTUNITY VENTURES

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§ 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 §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.

20. Financial information concerning the franchisor.

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