The Franchise Disclosure Document (FDD) is the main source of information for those interested in learning more about or investing in a franchise. You can obtain these from franchisors, paid sources, and free online databases. You’ll find a list of free state-run databases below along with a link to some examples.
What is the FDD?
It’s the 23-part document the FTC’s Franchise Rule (16 CFR Part 436) requires the franchisor create and present to potential franchisees. It can be very insightful but its level of usefulness depends on the detail provided by the franchisor. The sections include:
- The Franchisor and any Parents, Predecessors, and Affiliates
- Business Experience
- Initial Fees
- Other Fees
- Estimated Initial Investment
- Restrictions on Sources of Products and Services
- Franchisee’s Obligations
- Franchisor’s Assistance, Advertising, Computer Systems, and Training
- Patents, Copyrights, and Proprietary Information
- Obligation to Participate in the Actual Operation of the Franchise Business
- Restrictions on What the Franchisee May Sell
- Renewal, Termination, Transfer, and Dispute Resolution
- Public Figures
- Financial Performance Representations
- Outlets and Franchisee Information
- Financial Statements
List of State-run FDD DatabasesAlabama
Puerto RicoRhode Island
Indiana FDD Database Example: Mac’s Convenience FDD [PDF]
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