Under the FTC Rule, state NASAA standards, and the federal E-Sign law, a franchise system may deliver a franchise disclosure document
by electronic means, or in machine readable media (such as a CD), provided that the disclosure document
: is delivered as a single, integrated, document or file (a non-editable format like PDF is recommended); has no extraneous content beyond what is required or permitted by law; has no links to or from external documents or content; is delivered in a form that enables the recipient to store, download, retrieve, maintain and print the disclosure document
for future reference and; conforms as to its content and format to the requirements of law.
In another important change, the revised rule permits franchise systems to furnish their disclosure documents
not just to prospective franchisees themselves, but to their "representatives" (attorneys, accountants or other agents).
Therefore, sellers who make such promises must include the material terms of the refund or cancelation policies in an attachment to the disclosure document
and will need to be factored into disclosure documents
The disclosure document
must attach copies of all agreements the franchisee must execute as part of the franchise, a copy of the financial statements, reports and other documents as required by the franchise regulation.
Today's implementation of the all electronic standard for primary market documents, along with a companion pilot system for the submission of continuing disclosure documents
, significantly increases the volume of document submissions to EMMA.
This would include not only delivery requirements for disclosure documents
, but also tile importance of not making financial performance representations outside of the disclosure document
In addition to the governmental entity issuing municipal securities, public officials of the issuer who have ultimate authority to approve the issuance of securities and related disclosure documents
have responsibilities under the federal securities laws, as well.
Consequently, while some delays are expected as they are every spring given the number of renewal filings, franchisors should not expect undue difficulty with franchise registration states if they have carefully prepared their disclosure documents
Investors and securityholders are urged to read the disclosure documents
regarding the proposed merger when they become available because they will contain important information.
The Commission (SEC) is issuing this report to emphasize the responsibilities under the federal securities laws of local government officials who authorize the issuance of municipal securities and related disclosure documents
and the critical role such officials play with respect to the representations contained in the Official Statements for these securities.
Meredith Cross, deputy director of the division of corporation finance of the SEC, told the Journal that although all of the comment letters agreed that disclosure documents
were too complex, there was no consensus on how to achieve simplification.