What is the Franchise Disclosure Document?
The Franchise Disclosure Document (FDD) is a legal document that franchisors must furnish to franchisees, as regulated by the Federal Trade Commission. This document contains material information about a franchise operation and is designed to help franchisees analyze the merits of a franchisor so that the franchisee can make an informed investment decision. Regardless of industry, size, or any other factor, the FDD follows the same format; and requires 23 disclosure items, such as Names, addresses and telephone numbers of other franchisees. A fully audited financial statement of the franchisor. The cost required starting and maintaining the business. The responsibilities the franchisee and the franchisor will share once you buy a franchise. Litigation involving the company or its officers, if any. The FDD must be presented to the franchisee at least 10 days prior to the signing of the Franchise Agreement.
