Item 23 are the receipts. For this section, you just have to tell us anyone who’s going to be a franchise salesperson. A franchise salesperson is a person that offers for sale, sells, or arranges for the sale of the franchise. This includes owners, employees, representatives, agents of franchisors, and third-party brokers who are involved in franchise sales activities. It does not include existing franchisees, unless they are providing franchise sales services on your behalf.
The Receipts are the last pages of the FDD and what we get your prospects to sign electronically through DocuSign when you use our Map System for disclosure. These signed receipt pages are your proof that you complied with the requirement of giving prospective franchisees a valid FDD in a timely manner prior to signing a contract or accepting any funds. You will notice a duplicate copy of the receipt page in your FDD. It’s not a typo. It’s required by the rule from a time prior to electronic receipts when a prospect would sign both and tear one out of the FDD for you to keep.
Sample Item 23
ITEM 23: RECEIPTS
This disclosure document summarizes certain provisions of the franchise agreement and other information in plain English. Read this disclosure document and all agreements carefully.
If Belmont offers you a franchise, it must provide this disclosure document to you 14 calendar days before you sign a binding agreement with, or make a payment to, the franchisor or an affiliate in connection with the proposed franchise sale.
If Belmont does not deliver this disclosure document on time or if it contains a false or misleading statement, or a material omission, a violation of federal law and state law may have occurred and should be reported to the Federal Trade Commission, Washington, D.C. 20580 and [state agency].
Belmont’s sales agent for this offering is Roger Owens, 111 Capitol Street, Indianapolis, IN (123- 555-5555).
Issuance date: April 15, 2008
I received a disclosure document dated April 15, 2008, that included the following Exhibits:
- Belmont Franchise Agreement
- Belmont Lease of Premises
- USA Credit Corp. Equipment Lease
- Belmont Equipment Purchase Note
- Belmont Initial Fee Loan Agreement
- Belmont Operating Manual Table of Contents
- Belmont Confidentiality and Non-Compete Agreement for Outlet Managers
- Belmont Non-Compete Agreement for Franchisee Shareholders
- Belmont Guarantee of Performance for Franchisee Shareholders
- Belmont Mufflers Audited Financial Statements for 2005, 2006, and 2007
- Richard McDonald Audited Financial Statements for 2005, 2006, and 2007
- CTF International Audited Financial Statements for 2005, 2006, and 2007
- CTF International Guarantee of Performance
Date: _____________ Your name (Please print): ____________________________
Your signature: __________________________________________________
You should return one copy of the signed receipt either by signing, dating, and mailing it to Belmont at 111 First Street, Jackson, MN 55000, or by faxing a copy of the signed receipt to Belmont at (111) 223-3344. You may keep the second copy for your records.
This is a sample section from a fictional FDD for Belmont Muffler Shops that was prepared by the Federal Trade Commission as a compliance guide for franchisors preparing their FDD. These are used to provide an idea of what these items may look like in an FDD, but keep in mind, your FDD will most likely vary significantly from these examples.