Franchise Glossary
FDD (Franchise Disclosure Document)
The comprehensive legal document containing 23 items of required information about a franchise opportunity.
The FDD is the cornerstone document of franchise due diligence. It includes the franchisor's audited financial statements, fee structures, litigation history, franchisee obligations, territory details, and a list of current and former franchisees. The FTC requires franchisors to provide this document at least 14 days before any binding agreement is signed. Each of the 23 items provides specific categories of information designed to help prospective buyers evaluate the franchise before investing.
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