Franchise Disclosure Document Development for Franchisees

A Franchise Disclosure Document (FDD) provides prospective franchisees with information about a franchisor, the franchise system, and the agreements they will need to sign so that they can make an informed decision. The disclosure document provides constructive and reliable information about the franchise. It also provides franchisees with current information about the franchise that they need to run their business. Franchise disclosure document development is therefore of vital importance to a franchisee, as it is includes information designed specifically to educate franchisee’s about a particular franchisor, its network, and operations. At, Franchise Administration, we can assist with drafting a comprehensive FDD for you to make informed decisions in the franchising industry.

Franchise Disclosure Document Development Includes:

The Franchisor and any Parents, Predecessors, and Affiliates

• This section provides a description of the company and its history.  

Business Experience

• This section provides biographical and professional information about the franchisors and its directors and executives.   

Litigation

• This section provides current and past criminal and civil litigation for the franchisor and its management.    

Bankruptcy

• This section provides information about the franchisor and any management who have gone through a bankruptcy.  

Initial Fees

• This section provides information about the initial fees, the range, and factors that determine the amount of the fees.  

Other Fees

• This section provides a description of all other recurring fees or payments.   

Initial Investment

• This section includes all the expenditures required by the franchisee to make to establish the franchise.  

Restriction on Sources of Products & Services

• This section includes the restrictions that franchisor has established regarding the source of products or services.  

Franchisee’s Obligations

• This section provides a reference table that indicates where in the franchise agreement franchisees can find the obligations they have agreed to.   

Financing

• This section describes the terms and conditions of any financing arrangements offered by the franchisor.   

Franchisor’s Assistance & Advertising / Computer Systems and Training

• This section describes the services that the franchisor will provide to the franchisee.  

Territory

• This section provides the description of any exclusive territory and whether territories will be modified.   

Trademarks

• This section provides information about the franchisor’s trademarks, service, and trade names.   

Patents, Copyrights, and Proprietary Information

• This section provides information on how the franchisee uses patents and copyrights.  

Obligation to Participate in the Actual Operation of the Franchise Business 

• This section describes the obligation of the franchisee to participate in the actual operation of the business.  

Restrictions on What the Franchisee may Sell

• This section includes any restrictions on the goods and services that the franchisee may offer its customers.  

Renewal, Termination, Transfer, and Dispute Resolution

• This section indicates when and whether the franchise can be renewed or terminated, franchisee rights and restrictions if there are disagreements with the franchisor.   

Public Figures

• If the franchisor uses public figures (celebrities or public persons), the amount the person is paid is revealed in this section.   

Financial Performance Representations

• Here the franchisor is allowed, but not required, to provide information on unit financial performance.   

Outlets and Franchisee Information

• This section provides locations and contact information of existing franchises.  

Financial Statements

• Audited financial statements for the past three years are included in this section.       

Contracts

• This section provides of all the agreements that the franchisee must sign.  

Receipts

• Prospective franchisees must sign a receipt to say that they received the FDD.

For assistance with your franchise disclosure document development – Contact Franchise Administration