Melvin Feller Business Consultants 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. 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:

1. Melvin Feller Business Consultants 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.
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

2. 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

3. 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
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,
Business Disclosure Statements and What to Avoid by
Melvin Feller
Business Disclosure Statements and What to Avoid by Melvin
Feller

4. 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.