Material Changes in UFOC
Here is an interesting problem regarding the information in a UFOC.
There was a controversy at the franchise pundit's forum about the number of Play N Trade Video Game Franchises.
One poster claimed that "There are over 125 Play N Trades open now."
This would seem to be a simple factual problem to resolve. Look up the current UFOC at Caleasi and count the number of franchisees listed in Item 20.
Unfortunately when you look at the the UFOC and the list of franchisees there are a number of problems.
First, we are in 2008 and the only UFOC filed is the 2007 UFOC.
Second, the 2007 UFOC only lists the franchisees that were in the system at the end of 2006!
If you are investigating this franchise system, you cannot contact all the franchisees because the list that you are given is so dated.
The franchisor is supposed to update its UFOC on a quarterly basis and bringing it up to date with respect to material changes.
How many prospective franchisees got correct disclosure about the the franchisees in the system?
