I am not sure who else is adopting the NASAA Multi-Territory Definition, but FranData says they are adopting the definitions. Back in September of 2014, Franchise and Business Opportunity Project Group of The National Association of State Administrators Association [NASAA] adopted Multi-Unit Commentary. The Multi-Unit sought to universalize terms nomenclature used to identify various franchise relationships.
The NASAA Multi-Unit nomenclature was set to be adopted by franchisors with their 2015 updates. For those franchisors who have not updated their franchise disclosure documents [FDD], this may be one more reason to update FDD with the new NASAA Multi-Unit nomenclature.
Frandata boosts of:
Having the largest database of FDDs in the world, with close to 40,000 and counting, consisting of brands actively franchising in the United States and going back 25+ years.
FranData is also the host of the Small Business Association’s [SBA] franchise registry.
Visit our blog next week to learn more about SBA registry.
As part of FranData’s announcing the adoption the NASAA Multi-Unit definition, FranData provided a nice skinny on the nomenclature definitions. Here it is:
• Unit [Unit]—The usual offering of a single franchise unit.
• Area Developer [AD]—The right to open and operate multiple units within a designated geographic area. FDDs may also use such terms as multi-unit, area franchisee, or regional developer.
• Area Representative [AR]—The right to recruit third parties as unit franchisees, and/or provide support to third parties entering into unit agreements. The AR may or may not have their own unit. FDDs may also use such terms as regional developer, area developer, or development agent. NASAA has mandated that separate FDDs be created for franchisors offering area representative agreements.
• Sub-franchisor [Sub]—Grants unit franchises to third parties with a designated territory. Third parties signing the unit agreements are sub-franchisees. FDDs may also use such terms as area franchisor, master franchisee, or regional franchisor. [We use the term “Master” for such offerings outside the U.S.]
Click here to read more about the New Multi-Franchise Disclosure Changes or visit: https://gettinslaw.com/franchising/2015/02/02/are-you-ready-for-the-new-multi-franchise-disclosure-changes/
Per Edith Wiseman, President of FranData:
When franchisors ask us to benchmark their performance against their peers, it’s important that we all agree on the types of franchising programs being used and their relative historical results. Franchisors use single-unit franchising, multi-unit franchising, area representatives, sub-franchising, master franchisees, licensing and other growth channels. It is crucial that we are able to do apples-to-apples comparisons when gauging the relative success of their efforts.