FDD Item 17
Renewal, Termination, Transfer, and Dispute Resolution
FDD Item 17 is a cross-reference table summarizing key franchise-agreement provisions: renewal terms, conditions of franchisor termination, conditions of franchisee termination, transfer rights, post-term obligations, and dispute resolution procedures.
Why It Matters
Item 17 is the lifecycle summary of the franchise relationship — how it starts, how it can end, what happens at renewal, and what happens after termination. The single most important item for understanding long-term franchisee rights.
What Item 17 Must Disclose
- Length of initial term and renewal rights
- Conditions under which the franchisor can terminate
- Conditions under which the franchisee can terminate
- Transfer rights and process (sale, assignment, change of control)
- Post-term obligations (non-compete, confidentiality, de-identification)
- Dispute resolution procedures (mediation, arbitration, choice of law, venue)
What to Look For
- Termination 'for cause' clauses with broad franchisor discretion
- Renewal requirements that include a new initial fee plus relocation/remodel obligations
- Mandatory arbitration in the franchisor's home state — limits franchisee enforcement leverage
- Post-term non-compete clauses with broad geographic scope
Go Deeper
FDD Item 17 Explained: The Renewal and Termination Trap Most Buyers Miss
Item 17 is the section every buyer should read three times. It controls what happens when the initial term ends, what triggers termination, what your post-termination obligations are, and what happens when you eventually want to sell. Most buyers focus on Items 5, 7, and 19 — and then get blindsided by Item 17 in year nine.