A Franchise Disclosure Document is a legal document that franchisors are required to provide to prospective franchisees under the Federal Trade Commission’s Franchise Rule. Commonly referred to as the FDD, it contains twenty three standardized Items that explain the franchisor’s background, fees, territory rights, obligations, financial performance representations, contracts and financial statements.
The purpose of the FDD is to give buyers the information they need to evaluate the franchise before signing an agreement or paying any money.
The FDD protects both buyers and franchisors by:
providing transparency during the sales process
ensuring every candidate receives uniform disclosures
helping buyers understand risks and expectations
reducing misrepresentation by requiring standardized disclosures
creating a paper trail for regulatory compliance
supporting informed decision making across franchise systems
The FDD is one of the most important documents in franchising.
The FDD includes twenty three disclosure Items, such as:
the history of the franchisor
any litigation or bankruptcy history
initial and ongoing fees
territory rights
restrictions on sources of products
training and support
advertising obligations
financial performance representations
outlet openings and closures
financial statements
all contracts the franchisee must sign
Each Item provides specific information required by federal law.
The FDD plays a central role in the franchise sales process. Franchisors must:
give the FDD at least fourteen days before signing
update it annually
amend it when material changes occur
register it in registration states when required
Candidates use the FDD to:
evaluate risks and costs
compare franchise systems
review financial performance claims
understand territory protections
examine renewal, termination and transfer rights
Search for any brands disclosure document on the Electronic Filing Depository
Franchise Registration State
FDD Renewal
Material Change
Franchise Examiner
Franchise Exemption
Notice Filing State
Non Registration State
Stop Order
Franchise Registration Management
Franchise Territory Mapping
Integrated Document Signing
CRM Tools
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Last updated: November 26, 2025
