Texas Law of Business Opportunities
The Texas Business Opportunity Act provides a number of required disclosures:
Disclosure Requirement
Under the Texas Business Opportunity Act, the seller must provide you with the following information at least 10 days before you sign a contract or turn over any money to the seller:
The names and addresses of all persons affiliated with the seller in this particular business;
A copy of a current financial statement of the seller;
A complete description of the actual services the seller agrees to perform for the purchaser;
If training is promised, a complete description of the training, length of training, and cost of travel or lodging during the training;
If services are promised in connection with placement of equipment or products, the full nature of the services and the nature of agreements to be made with the owners or managers of business locations;
If the seller or his or her representatives have been adjudged bankrupt or have been subject to a judgment in a civil suit involving fraud or embezzlement during the past seven years, he or she must tell you;
If the seller makes representations about sales or earnings potential, he or she must disclose both the total number of people participating in the business opportunity for the past three years and the total number of people who have actually achieved the represented sales or earnings within the past three years.
Cancellation. The seller must give you the following statement in writing as part of the disclosure requirement: If the seller fails to deliver the product, equipment, or supplies necessary to begin substantial operation of the business within 45 days of the delivery date stated in your contract, you may notify the seller in writing and cancel your contract. (my emphasis)
Imagine how powerful this information would be if it was public, and could be tested by independent third party agents. It is of no use if only disclosed 10 days before the purchase as there is not sufficient time to conduct the due diligence properly.
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