Franchise Disclosure Document

A franchise disclosure document (FDD) is a legal document that provides prospective franchisees with detailed information about a franchisor and its franchise system. It typically includes an overview of the franchisor’s history, business model, and management team, as well as details on the franchise offering, such as the initial investment, ongoing fees, territory rights, and training and support provided. The FDD also includes audited financial statements, a list of current and former franchisees, and any litigation or bankruptcy history. The purpose of the FDD is to help prospective franchisees make an informed decision about whether to invest in the franchise, and to comply with federal and state franchise disclosure laws. The document should be carefully prepared and updated annually by the franchisor, and should be provided to prospective franchisees at least 14 days before any agreement is signed or payment is made.