2008 Franchise Disclosure Compliance Calendars

We are pleased to provide you with the MSA 2008 Franchise Disclosure Compliance Calendar. We hope you will find this to be a convenient reference to calculate the disclosure timing requirements mandated by FTC regulations and various state laws.

Changes to the FTC Rule:
During 2007 the Federal Trade Commission issued a revision to the franchise disclosure rule which impacted when a Franchise Disclosure Document must be presented to prospective franchisees. Franchisors were allowed to adopt the new rule or continue to use the old rule through July 1, 2008. We have included for your convenience two disclosure calendars:

• Old Rule – Business Day Calculation – January 1, 2008 through June 30, 2008
• New Rule – Calendar Day Calculation – January 1, 2008 through December 31, 2008

Old Rule – Business Day Calculation

Disclosure Rules for January 1, 2008 through June 30, 2008

FTC 10 Business Day Rule:
FTC regulations require that you distribute a complete franchise offering circular with exhibits to all prospective franchisees on a date that is the earlier of either the first face-to-face meeting or on a date that is not less than 10 "business days" prior to the signing of any agreement or the acceptance of any money. Note that it is a requirement that you deliver all of the relevant agreements and documents with the UFOC. The first face-to-face meeting means the first time you talk to a prospective franchisee about buying a franchise.

FTC 5 Business Day Rule:
In addition to the 10 Business Day Rule, the FTC also requires that no less than 5 "business days" prior to the signing of any agreement or the acceptance of any money that you deliver to a prospective franchisee a completed copy of all agreements and related documents to be signed by the franchisee. You must deliver a completed, "ready to be signed" set of documents to a prospective franchisee not less than 5 business days before you can accept any check or signed agreement. If any state's holiday occurs within the 10-day period or 5-day period, add the appropriate number of days to the disclosure period for sales in that state.

Weekends and holidays excluded:
For purposes of counting "business days", all Saturdays, Sundays and holidays are excluded. Federal holidays - January 1 (New Year's Day), January 21 (Martin Luther King, Jr. Day), February 18 (President's Day), May 26 (Memorial Day), July 4 (Independence Day), September 1 (Labor Day), October 13 (Columbus Day), November 11 (Veteran's Day**), November 27 (Thanksgiving Day) and December 25 (Christmas) - are excluded everywhere.

**November 11th, 2008 is the legal public holiday for Veterans Day. While many government offices and businesses will be closed on the 10th, for the purpose of this calendar we are using the 11th for Veterans Day. These federal holidays are noted on the calendar, and the effect of these holidays has been taken into consideration. Please note that we have not taken into consideration the effect of state holidays. Certain state holiday dates will be excluded for purposed of calculating "business days" for proposed sales in those states. You will need to do this in the appropriate situations.

Please note: Jewish and Islamic holidays begin sundown the evening before the indicated date. Islamic and Chinese New Year may vary.

New Rule – Calendar Day Calculation

FTC 14 Day Rule:
FTC regulations require that you distribute a complete Franchise Disclosure Document (FDD) with exhibits to all prospective franchisees on a date that is not less than 14 calendar days prior to the signing of any agreement or the acceptance of any money. Note that it is a requirement that you deliver all of the relevant agreements and documents with the FDD. The first face-to-face meeting requirement for providing an FDD has been eliminated under the new rule.

FTC 7 Day Rule:
In addition if the franchisor makes a unilateral change in the documents, the FTC also requires that no less than 7 calendar days prior to the signing of any agreement or the acceptance of any money that you deliver to a prospective franchisee a completed copy of all agreements and related documents to be signed by the franchisee.

Calculation Method:
In calculating the appropriate time period, you may not count either the day the Franchise Disclosure Document is delivered or the day on which the agreement is signed or money is received. You will note in reviewing the calendar that we have taken this method of calculation into consideration.

The Business Day and Calendar Day Calendars are designed to let you know the first day that you can close a transaction if you complied with that applicable rule as of that date. We hope that you will find these calendars to be useful tools throughout the year. You should always verify the calculation prior to use.

Click here to view the 2008 Disclosure Compliance Calendars. The Calendar Day Calendar follows the Business Day Calendar.

Copyright Michael H. Seid & Associates LLC 2002-2008
94 Mohegan Drive, West Hartford, CT 06117
www.msaworldwide.com
(860) 523-4257