Melvin Feller Discusses Business Disclosure Statements and What to Avoid

Melvin Feller Discusses Business Disclosure Statements and What to Avoid

Melvin Feller Business Group in Burkburnett Ministries and Dallas Texas and Lawton Oklahoma. Our mission is to call and equip a generation of Christian entrepreneurs to do business as ministry. We provide workshops and resources that help companies discover how to do business God’s way and provide a positive outreach as the director. When the heart of a business is service rather than self it can be transformed into a fruitful business ministry earning a profit and being of service to the community and their customers. Melvin Feller is currently pursuing another graduate degree in business organizations.

Business Disclosure Statements and What to Avoid by Melvin Feller

Buying a business opportunity, franchise, licensee opportunity or distributorship is a big decision, one you should not take lightly. Thankfully, there are some serious regulations in place at the federal level as well as within many states that are designed to protect you from making a bad decision or being taken in by a fraudulent enterprise, starting with the critically important disclosure statement.

The disclosure statement is a document that any seller of a business opportunity, franchise or similar concern is required to provide to you as a potential buyer by law. It details everything you need to and should know about the business in question and must be given to you if not during the first “personal meeting,” then within a specified timeframe. Although the disclosure requirements as delineated by the U.S. Federal Trade Commission (FTC) are considerable, those set forth by the 26+ states that also have them do not overrule them. So be certain to check the regulations in your state in addition to those of the FTC before you sign on the dotted line or give the seller any money.

Remember, oral statements, exchanges or promises that are made to you by the seller or between the two of you are not legally binding! This is precisely why knowing what comprises a comprehensive disclosure statement is so important.

So here it is, a brief overview of what a truly solid disclosure statement should contain as stipulated by the FTC:

Business Disclosure Statements and What to Avoid by Melvin Feller

Name under which the seller is doing business, including such particulars as trademarks, trade names and service marks, et al.

Five-year or more retrospective of principal players’ business experience, as well as any parent firms

Seven-year retrospective re: any legal entanglements involving either the principals or the company, including such things as fraud, felonies, civil actions, et al.

Past seven-year fiscal profile to include bankruptcy, insolvency, etc.

Factual description of the enterprise being sold

Clear statement of total funds to be paid by the buyer and under what conditions, as well as any refund policy

Clear statement of any recurring funds to be paid, for what purpose, at what intervals and under what conditions

Required affiliations between the buyer and any other concerns as set forth by the seller

Required purchases, leases or rentals as set forth by the seller

Clear accounting of the financial implications for the seller as a result of buyer arrangements with identified suppliers or other concerns

Material terms and conditions of any financing arrangements between the seller and the buyer

Business Disclosure Statements and What to Avoid by Melvin Feller

Clear statement of facts re: goods and services for sale, potential customers and/or geographic parameters for the sale of allowed goods and services, as well as any agreement with regard to protected markets/territories

Clarity on expectations re: direct operation of the purchased enterprise and by whom

Details re: duration of the arrangement between the seller and buyer, renewal, extension, termination, modification, sale, refusal to renew or extend, etc.

Total profile of affiliated concerns to date, with emphasis on those nearest to the potential buyer’s intended locale, including contact information for referrals

Role of the seller, if any, in site selection for the enterprise

In-depth review of initial and ongoing training program(s) and what can be expected

Public figure affiliation (on the part of the seller) disclosure, if applicable

Business Disclosure Statements and What to Avoid by Melvin Feller

Most recent fiscal year financial statement (balance sheet), as well as other income-related documents as specified.

In addition, the FTC stipulates that a number of CAUTION notice be included in the disclosure statement, just to ensure there is no confusion as to what is being promised. Where you see one, pay attention. Finally, any seller of a business opportunity, franchise, licensee opportunity or distributorship that promises you a specific level of income is doing so at their own peril, unless the context in which they are providing the information meets with some specific requirements. For a more in-depth look at what those are, as well as the overall disclosure statement content as prescribed by the FTC that is outlined here, please click on the Commission’s Disclosure Requirements and Prohibitions Concerning Franchising and Business Opportunity Ventures webpage now.

Melvin Feller Business Consultant, Business Owner, Burkburnett ministries and Graduate Student Candidate in Business Organization

Melvin Feller Business Consultants Ministries Group in Texas and Oklahoma. Melvin Feller founded Melvin Feller Business Consultants Group and Burkburnett Ministries in the 1970s to help individuals and organizations achieve their specific Victory. Victory as defined by the individual or organization are achieving strategic objectives, exceeding goals, getting results or desired outcomes and a positive outreach with grace and as a ministries. He has extensive experience assisting businesses achieve top and bottom line results. He has broad practical experience creating WINNERS in many organizations and industries. He has hands-on experience in executive leadership, operations, logistics, sales, program management, organizational development, training, and customer service. He has coached teams to achieve results in strategic planning, business development, organizational design, sales, and customer response and business process improvement. He has prepared and presented many workshops nationally and internationally.

President of Melvin Feller Business Group With over three decades of executive coaching, speaking, and most importantly, real-life, in-the-trenches experience.