Adam H. Putnam, Commissioner - Tom A. Steckler, Director

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The Sale of Business Opportunities

Before purchasing a business opportunity or franchise in the State of Florida, you should know about Chapter 559, Part VIII, Florida Statutes, the Sale of or Lease of Business Opportunities. This law requires certain sellers of business opportunities to file a disclosure document, including a copy of the purchase contract, with the Department of Agriculture and Consumer Services before soliciting in Florida. The law applies to business opportunities with a purchase price in excess of $500 and that meet one of the following criteria:

• The seller offers assistance in finding locations for the equipment (vending machines, display racks, etc.) or supplies the name of a locator company;

OR

• The seller offers training or marketing on how to be successful for example: a home based computer business;

OR

• Offers to repurchase the equipment or refund all or part of the purchase price paid or a guarantee in writing that the purchaser will derive income that will exceed the purchase price.

• Before purchasing a business opportunity, get as much information as possible. Read the disclosure documents and the contract carefully. Understand what you are purchasing.
• Shop and compare. Look at other operations of the same type. Other companies may offer a better deal.
• Consult an attorney and/or accountant before investing.
• Remember, the Florida Sale of Business Opportunities Act requires the business to give you, the potential purchaser, a copy of the disclosure statement for review three (3) working days before any money is given to the seller or a contract signed. As part of the disclosure, you are entitled to a copy of the contract before you sign it.
• Talk to current investors; preferably, visit them in person and see for yourself. Their names and addresses may be in the disclosure document. If they are not, ask the business to provide them. Ask these investors whether information in the disclosure statement matches their experience with the company. Failure or refusal to provide names and addresses of investors should serve as a warning sign that the venture may be questionable.
• Ask questions. Investigate earnings claims. Keep in mind that once you invest your money, you may be competing with other, more experienced independent operators.
• Get all promises in writing from an authorized representative of the company.
• Listen closely to the sales presentation. A seller with a good offer doesn't have to use pressure sales tactics.
• Investigate and determine if there is a market in the area for this product or service. In the case of vending machines, racks, etc., are you going to find locations to place them?
• Call the Florida Department of Agriculture and Consumer Services' Consumer Hotline at 1-800-HELP-FLA (435-7352) for details about the Florida Business Opportunities Act. Find out if the business has filed with the Department and if there have been any complaints filed against it.
• If the business is exempt from Florida law, it may still have to comply with the Federal Trade Commission's Franchise Rule. For more information, contact the Federal Trade Commission, Enforcement Division, Bureau of Consumer Protection, Washington, DC 20580.
• Check with your local Chamber of Commerce, Better Business organization, local consumer affairs office, or the business directories at your local libraries for more information.

• Pressure to sign a contract immediately.
• Unsubstantiated claims of extraordinarily high or guaranteed earnings, possibly on a part-time basis.
• Claims that profits can be achieved easily or with little work or time investment.
• A required initial investment that greatly exceeds the fair market value of any products, kits or training.
• A large fee payable before you receive anything in return.
• Promise that no selling or other experience is necessary.
• Evasive answers by the salespeople or unwillingness to give disclosure documents required by law.

For information on a seller of business opportunity or to file a complaint, please contact the Florida Department of Agriculture and Consumer Services at 1-800-HELP-FLA (435-7352) in Florida, or 850-410-3800 if calling from outside the state.