Any company that has been franchising for longer than a couple years knows the basic routine to prepare for the upcoming renewal season. Indeed, we have previously addressed many of these issues. The pointers usually include getting in touch with your accountants to prepare for your audit, compiling information needed for the Item 20 charts, and reviewing the entire Franchise Disclosure Document to reflect any and all changes in your system.
There are also some items that can be forgotten as your system matures:
- Look at your sales calendar. Plan in advance for your renewals relating to the timing of your sales activity. Many registration states prohibit sales in their state when a renewal is pending so you must sign your franchise agreements before filing any renewal application. So, think ahead--whether closing sales, discovery days or any other sales activity--because you may have to "go dark" for a while!!
- Is it time to include an FPR? If you are a start-up franchisor and have not included a Financial Performance Representation in Item 19, it may be time to consider it. Potential franchisees like to see financial information when considering an opportunity and can wonder why a more mature system is not including it in the FDD. It can also help them obtain financing. More and more, we see that systems are including this information, so we suggest that you consider this step. It does take a lot of careful preparation and gathering of financial information, so make sure to allow enough time to put this together properly.
- Website Updates. Have you reviewed your website recently - with your attorney? Well, if you have not reviewed it, your examiner might! Though many franchisors view their website as merely a marketing tool, it is reviewed from a regulatory standpoint for financial representations, false advertisement, disclaimers and inconsistencies with the information in your FDD. Also, as this blog has noted, the government has been checking on compliance with internet privacy standards. So, if you have updated your website, or even if you have not, put a thorough review of it on your list before submitting your renewal.
- Don't forget your Marks. The US Patent and Trademark Office does require filings to maintain your marks. Check in with your trademark attorney to be sure that all filings related to your marks are up to date.
This is a busy time, but some advance planning and checking can make it easier. Happy Renewal Season!!