CA Franchise Specialist Practice Questions - California Certified Specialist - Franchise & Distribution Law Exam

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A franchisor wishes to include a Financial Performance Representation (FPR) in its FDD. Under 16 CFR §436.5(s), which of the following statements about FPRs is correct?

FPRs are mandatory in every FDD FPRs are optional, but if made they must have a reasonable basis and written substantiation available at the time of disclosure FPRs may only be made orally to prospective franchisees during sales meetings FPRs must guarantee a minimum return on investment to the franchisee

Correct Answer:

FPRs are optional, but if made they must have a reasonable basis and written substantiation available at the time of disclosure

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