Disclosure Documents

The franchise disclosure document is not only a legal requirement but is also a very important element of the franchise package as this document provides full disclosure to prospective franchisees that are contemplating applying to and joining your franchise network. The disclosure document became a legal requirement with the promulgation of the Consumer Protection Act, No. 68 or 2008 (CPA) and it is now law that all franchise companies issue a disclosure document containing at least the minimum information as required by the Act.

But don’t just compile a disclosure document because it’s the law. Compile this document, cos it’s the right thing to do…

A complete and factual disclosure document ensures that prospective franchisees have sufficient information to make an informed decision about the business opportunity and ensures that claims of “I didn’t know” or “I wasn’t told” don’t arise down the line giving franchisees recourse if the relationship goes awry.

Although a well-written disclosure document can also be used as the organisation’s marketing prospectus, it is still important that the document contains the necessary facts about the business to assist the potential franchisee to make an informed decision about the  opportunity you’re presenting.  For this reason as well as to ensure that you comply with the CPA requirements, the standard Franchise Association of South Africa (FASA) format is adhered when we compile disclosure documents on behalf of our clients.

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In order to see the exact requirements for the information to be included in your Disclosure Document download the FASA document here.

Disclosure Document Requirements FASA updated 13 Aug 2011