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Where Do I Begin?

Franchise Disclosure Document: Where do I even begin?


You’ve picked out a franchise and you’re excited to get the ball rolling, but then you are sent a huge document called a Franchise Disclosure Document (FDD) with all sorts of representations and warranties and all of a sudden, the excitement is gone and the daunting task of leafing through the FDD is before you.  You stare at this enormous document you are supposed to go through and think to yourself, where do I even begin?  Do I really have to read this entire thing?

The answer is yes, you should review the entire document (or hire a franchise attorney to review it for you) because the FDD contains valuable information that will help you determine whether the franchise is as great as it claims it to be.  It is much easier, and less expensive, to take the time to review the entire FDD and decide the franchise is not a wise investment than it is to hastily go through the FDD, purchase a franchise and try to get out of the contract and a bad franchise system.

The FDD is required to contain certain information in twenty-three prescribed items such as the business experience of key personnel, the initial and ongoing fees to be paid and the support you can expect from the franchise.  Although the document itself is a bit intimidating, it contains a wealth of information and can serve as a guide for what to expect from the system so that you can have a better idea as to whether the franchise is a good fit for you and whether it is worth the investment.

So brew a cup of coffee and start from the beginning; at the end of the day, you’ll be glad you did.