SPECIAL SECTION: PART 3
Breaking Down
the FDD
Items 9 & 15: Franchisee’s Obligations
L
By Nicole Micklich
ast month’s edition opened with the idea that buying into a franchise system means accepting the notion that if you play by the rules, you get the benefits of brand awareness and franchisor support. Those rules are set out in the FDD and the franchise agreement. They become binding obligations of the franchisee when the franchise agreement is signed. Item 9 of the FDD should contain a disclosure of all the “principal obligations of the franchisee under the franchise and other agreements” once the franchise agreement is executed. Item 15 must describe how much direct involvement the franchisee is required to have in the operation of the franchise business.
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FranchiseDictionaryMagazine.com
