So, What Is a Franchise Disclosure Document?

This came up over coffee recently: what’s an FDD?

My friend had just started looking into franchising and said, “They keep talking about this giant document like it’s a big deal. Do I actually need to read it?”

Short answer? Yes.

Long answer? Let’s get into it.

It's Basically the Franchise Fine Print

An FDD, or Franchise Disclosure Document, is a big (like, big) legal document that lays out all the important info you need before signing on with a franchise.

Think of it as the prenup before the business marriage.

It has 23 items — not chapters, not pages, but items — and each one digs into something different about the franchisor.

What's Inside?

Honestly, a lot. But the point is transparency.

The franchisor is required to give this to you before you invest or sign anything, so you have a clear picture of what you're getting into.

Here are just a few things it includes:

• The company’s background (Who are these people?)

• Franchise fees (How much will this cost me up front?)

• Royalties (And how much will they take later?)

• Any lawsuits or bankruptcies (Red flag or reasonable?)

• A breakdown of existing franchise performance (This one is gold)

• Your responsibilities as a franchisee (Spoiler: it’s not passive income)

It’s not exactly beach reading, but it is essential.

Why It Matters

People sometimes skip over it or skim it like the terms and conditions of a phone update. But this document? This is your future business life in print.

It shows you:

• Whether the franchisor actually supports their franchisees

• What kind of track record the business has

• If their promises are backed up by data

It also helps you compare apples to apples if you’re looking at more than one franchise opportunity.

Back to That First Question

So, what is an FDD?

It’s not just paperwork. It’s a tool. It’s your flashlight when you’re deciding whether to walk into a long tunnel (hopefully with profits at the other end).

If you’re thinking about joining a franchise system, don’t gloss over it. Read it. Ask questions. Take it to a franchise attorney if you can.

Because it’s not just 23 items. It’s your roadmap.

And don’t you want to know where you’re headed?

*This is not an offer to sell a franchise. Franchise offerings are made only through the delivery of a Franchise Disclosure Document (FDD)*