Franchise Disclosure Documents
Transforming your current business model into a franchise can be an exciting journey! However, the legal requirements can be overwhelming for new franchisors. One pivotal requirement is the preparation of the Franchise Disclosure Document, commonly known as an FDD.
What is a Franchise Disclosure Document?
The Federal Trade Commission (“FTC”) requires all franchisors to have a current FDD before offering and selling franchises in the United States.
The FTC mandates the inclusion of 23 Items of information and disclosures that must be made to franchisee candidates to give buyers essential information to make an informed decision before committing to a franchise investment.
The FDD can be complex and, if not prepared correctly, can be rejected by certain registration states.
Our approach to drafting Franchise Disclosure Documents.
Our philosophy in drafting an FDD is to create a readable, balanced document in plain English that increases sales while protecting Franchisors where it matters most. Many attorneys take the “kitchen sink” approach to drafting an FDD, creating a heavy and voluminous document that is a turn-off to prospects and unnecessary.
The franchise relationship should be a win-win.
With our collective 40+ years representing franchisors, including our involvement in litigating over 100 franchisor cases, we know what sections of the Franchise Agreement are of the utmost concern. An FDD should not intimidate prospects due to the length, complicated language, or overall one-sidedness of the Franchise Agreement.
Ready to get started?
If you are ready to franchise your business, our team can help you understand the steps involved in the preparation of an FDD and assist with FDD drafting, reviewing, and state registration requirements.
If you are an established franchisor, our attorneys can review and update your FDD to ensure your document complies with FTC requirements and isn’t a wet blanket in the sale process.
We are happy to discuss how can help draft, update, or simplify your company's Franchise Disclosure Document.
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