FDD Item 2
Business Experience
FDD Item 2 lists the directors, officers, and other key executives of the franchisor, with each person's principal occupation and employers during the past five years. It identifies who is running the franchise system day-to-day.
Why It Matters
Item 2 tells you whether the people running the franchise system have relevant experience and stability. High executive turnover (multiple roles in the last 5 years) or thin franchise-specific experience are signals worth investigating.
What Item 2 Must Disclose
- Name and current position of each director, principal officer, and other executive with management responsibility
- Principal occupations and employers for the past five years for each listed person
- Length of time in current role
What to Look For
- Multiple executives with under 12 months in current role — signals possible turbulence
- Executives whose only franchise experience is at this franchisor — limited cross-system perspective
- Empty or recently vacated key roles (CEO, COO, head of franchise development)
Go Deeper
FDD Item 2 Explained: Spotting Founder and Executive Red Flags Before You Sign
Item 2 lists the executives and key officers who run the franchise system. It's the section where you find out whether the people responsible for franchisee success have actually done this job before — or whether they've been hired into a brand they don't understand.