Check that supply restrictions and supplier benefits are in the disclosure document
Key facts
- Human involvement
- YellowClose supervision
- How AI is used
- From the disclosure document, list each supply arrangement, each restriction on goods or services the franchisee must buy or sell, each ownership or interest in a supplier the franchisee must use, and each financial benefit described. A financial benefit includes a rebate or other benefit to the franchisor, a master franchisor, or an associate of the franchisor or master franchisor. Do not build a money table from the agreement, and do not decide whether a term is unfair or lessens competition.
- What the lawyer must review
- The lawyer decides whether the disclosure covers each item the page requires. Franchisors must disclose rules about goods or services that franchisees must buy or sell when running the business. The disclosure document given to prospective franchisees and to current franchisees must include all supply arrangements, any restrictions on franchisees buying goods and services, any ownership or interest in a supplier a franchisee must use, and any financial benefit from a supply arrangement. A financial benefit includes rebates and other benefits the franchisor, master franchisor, or an associate of the franchisor or master franchisor gets from suppliers. The page also describes exclusive dealing and unfair contract terms. Those tests are not applied in this check. This is not a table of fees and rebates drawn out of the agreement, and it is not a review of the agreement for unfair terms. The linked page that defines an associate was not opened.
- Written for / version
- US
Open a jurisdiction version of this task to see which instruments apply: US
Who does what
| Role | What they do |
|---|---|
| Assistance | From the disclosure document, list each supply arrangement, each restriction on goods or services the franchisee must buy or sell, each ownership or interest in a supplier the franchisee must use, and each financial benefit described. A financial benefit includes a rebate or other benefit to the franchisor, a master franchisor, or an associate of the franchisor or master franchisor. Do not build a money table from the agreement, and do not decide whether a term is unfair or lessens competition. |
| Lawyer | Set the scope, supervise the work closely, verify every part relied on, resolve omissions and exceptions, and approve the exact output. |
Checklist
- The document is checked for all four items, including a supplier interest and a financial benefit.
- A financial benefit includes a rebate or other benefit to the franchisor, a master franchisor, or an associate of either.
- Exclusive dealing and unfair-contract tests are not decided in this checklist.
Related tasks
Draft or review a franchise disclosure document against the prescribed headingsCheck the franchisor's disclosure and any registration the jurisdiction requiresDraft or review a franchise agreement from the disclosure and the term sheetBuild a franchisee due-diligence issues list from the disclosure pack