Franchise Glossary
Disclosure Document (FDD)
The legally required document that franchisors must provide to prospective franchisees before any agreement is signed.
The Franchise Disclosure Document contains 23 specific items of information mandated by the FTC Franchise Rule. It covers the franchisor's background, litigation history, fees, obligations, territory rights, financial performance representations, and more. Prospective franchisees must receive the FDD at least 14 calendar days before signing any agreement or paying any money. Reviewing the FDD carefully — ideally with a franchise attorney — is the most critical step in franchise due diligence.
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