For the Bw Premier Collection franchise, what is the timeframe for disclosing previous involvement in civil litigation?
Bw_Premier_Collection Franchise · 2025 FDDAnswer from 2025 FDD Document
- The following paragraphs are added at the beginning of Item 3 of the Disclosure Document:
Except as provided below, neither we, any predecessor, any person identified in Item 2, or an affiliate offering franchises under our principal trademark:
- (a) has an administrative, criminal, or civil action pending against us, it, him, or her alleging a felony; a violation of a franchise, antitrust, or securities law; fraud; embezzlement; fraudulent conversion; misappropriation of property; unfair or deceptive practices; or comparable civil or misdemeanor allegations.
- (b) has been convicted of a felony or pleaded nolo contendere to a felony charge or, within the 10-year period immediately preceding the application for registration, has been convicted of or pleaded nolo contendere to a misdemeanor charge or been held liable in a civil action alleging: violation of a franchise, antifraud, or securities law; fraud; embezzlement; fraudulent conversion; misappropriation of property; unfair or deceptive practices; or comparable allegations.
- (c) is subject to a currently effective injunctive or restrictive order or decree relating to the franchise, or under a federal, state, or Canadian franchise, securities, antitrust, trade regulation, or trade practice law, as a result of a concluded or pending action or proceeding brought by a public agency; or is subject to any currently effective order of any national securities association or national securities exchange, as defined in the Securities and Exchange Act of 1934, suspending or expelling such person from membership in such association or exchange; or is subject to a currently effective injunctive or restrictive order relating to any other business activity as a result of an action brought by a public agency or department, including, without limitation, actions affecting a license as a real estate broker or sales agent.
Source: Item 23 — Receipts (FDD pages 54–203)
What This Means (2025 FDD)
According to the 2025 FDD, Bw Premier Collection must disclose previous involvement in civil litigation within a specific timeframe. Specifically, the FDD states that Bw Premier Collection must disclose if any person identified in Item 2 of the FDD has been held liable in a civil action alleging violation of a franchise, antifraud, or securities law; fraud; embezzlement; fraudulent conversion; misappropriation of property; unfair or deceptive practices; or comparable allegations within the 10-year period immediately preceding the application for registration.
This disclosure requirement is significant for potential Bw Premier Collection franchisees as it provides transparency regarding the litigation history of the franchisor and its key personnel. By understanding the types and frequency of past civil actions, franchisees can assess the potential risks associated with investing in a Bw Premier Collection franchise. This information can inform their decision-making process and help them evaluate the stability and ethical standards of the franchise system.
It is important to note that the disclosure requirement is limited to a 10-year period. While this provides a reasonable timeframe for evaluating past litigation, it does not cover any civil actions that may have occurred prior to this period. Therefore, prospective franchisees should consider this limitation and conduct their own due diligence to gather additional information about the franchisor's litigation history beyond the scope of the FDD disclosure. This may involve consulting with legal counsel, conducting independent research, and speaking with current and former franchisees to gain a more comprehensive understanding of the franchisor's litigation track record.