What is a Franchise Disclosure Document (FDD) and Why is it Important An explanation of the FDD, its contents, importance and how it can be used to evaluate franchises opportunities - courtesy of Franchise Consultants and Research Experts at FranchiseComplaints.org.
Further Reading & FDD Resources The Franchise Disclosure Document - Wikipedia Learn about the history, contents and importance of the FDD for the franchisor, franchisee and in franchise sales transactions more generally. The Franchise Agreement - Wikipedia Information about items within a typical franchise agreement and details on the legal implications and obligations of the franchisor and franchisee. Download Franchise Disclosure Documents Here This database features a complete collection of recent franchise disclosure documents. Search through and download PDF copies of all the latest Franchise FDD/UFOCs. Franchise Research & Reports - FranchiseComplaints.org Download comprehensive franchise research and due diligence reports.
The franchisor and any parents, predecessors and affiliates This report of the Franchise Disclosure Document provides a general description of the company and its history. It includes details on any parent, predecessor or affiliate companies involved or associated with the franchise system.
Business experience This report provides biographical and professional information about the franchisors and its officers, directors and executives. It will help you look into the professional background of key employees and executives working at the franchising company.
Litigation The FDD litigation report provides details on current and past lawsuits involving the franchisor and/or its management. It includes a history of criminal and civil litigation for the franchise system.
Bankruptcy This report provides details on any bankruptcies filed by the franchisor and its management.
Initial fees The FDD initial fees report provides detailed information on the initial costs incurred by new franchise owners. It includes information on the range and factors that determine the amount of any initial fees associated with the franchise purchase.
Other fees This report provides a details on all other recurring fees or payments that the franchisee is required to make to the franchisor or its affiliates.
Initial investment A report that includes all the expenditures the franchisee is required to make to establish the franchise business.
Restriction on sources of products and services This report highlights the franchise system’s restrictions placed on franchise owners regarding the source of products or services.
Franchisee’s obligations This item includes a table that references where in the franchise agreement franchisees can find the obligations they have agreed to.
Financing This item describes the terms and conditions of any financing arrangements offered by the franchisor.
Franchisor’s Assistance, Advertising, Computer Systems and Training This report describes the services that the franchisor will provide to the franchisee.
Territory This report provides the description of any exclusive territory and whether territories will be modified.
Trademarks This report provides details on any trademarks, service marks and trade names of the franchisor.
Patents, copyrights and proprietary information This item provides insight on how franchise owners are able to use the patents and copyrights of the franchise system.
Obligation to participate in the actual operation of the franchise business This report details the franchisee’s obligation to participate in the actual operation of the franchised business.
Restrictions on what the franchisee may sell A report that includes any and all restrictions on goods and services that the franchisee may offer its customers.
Agreement renewal, termination, transfer and dispute resolution This report informs the franchisee whether or not his/her franchise agreement can be renewed. If your franchise can be renewed this report provides details on when and how the franchisee can renew his or her contract with the franchise system. It also includes details on when and whether your franchise can be terminated and what the rights and restrictions of franchise owners are when it comes to disagreements with the franchisor.
Public Figures If the franchisor uses public figures (athletes, celebrities, politicians, public persons, etc.), the company must disclose the amount the person is paid for his or her involvement with and promotion of the franchise system or opportunities.
Financial Performance Representations Here the franchisor is allowed, but not required, to provide information on the financial performance of franchise units. This report can be valuable for determining how much franchise owners in the system are earning. whether or not they are profitable or have broke even on their investment with the franchise system.
List of Franchised Outlets and Franchisee Information This report provides locations and contact information of existing franchises.
Financial statements Audited financial statements for the past three years are included in this report. The financial statements of a franchisor can be essential in evaluating the financial health of the franchise system as a whole.
Contracts This section provides access to copies of all franchise-related documents and agreements that aired to be signed or initialed by the franchisee.
Receipts Prospective franchisees are required to sign a receipt that they received Franchise Disclosure Document.