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What is A Franchise Disclosure Document?

 

The FDD is mandated by the Federal Trade Commission. All people that offer a franchise, all franchisors have to follow that format. There are 23 sections, 23 items that they have to address.

13 states are registration states that states will review those documents, but with the FDC they just say here's kind of the format for you to disclose certain information to the consumers. There's no federal review of those.

The FDD comprises of franchise agreement and other exhibits and attachments which are very important including personal guarantees and non-compete and confidentiality agreements, so it's a total package. But essentially it is the documents that form a long-term contract that you will have to abide by long-term.

 
 

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