The Franchise Disclosure Document

How do you know if a franchise is really on the up and up? The answer is franchises are regulated by the Federal Trade Commission.?

Reviewing the FDD

Franchises are required to release a Franchise Disclosure Document every year. They have to file that and compile the data from all their franchisees to put into their updated franchise disclosure document, or as we call it, FDD.?

Each individual who is exploring their brand will receive a copy of that FDD. They have to sign it to prove that they've received it, and obviously they need to review and study it. Franchisors will have a review call with each prospective franchisee and review it with them.?

Hiring a Franchise Attorney

It's very important if there is a franchise that you feel could be a fit for you, you have that FDD reviewed by a franchise attorney before moving forward with that franchise.? Let me repeat that, a franchise attorney.? Do not use your cousin's wife's corporate attorney for her real estate business, because attorneys are very much like doctors and they have their own area of expertise. If your toe hurts, you wouldn't go to a dentist.?

A franchise attorney's expertise is reviewing those documents, writing those documents, and then giving you the feedback on what could be red flags or deal breakers for you.?

It's a key advantage to a franchise, because bankruptcies and litigation and all of that data has to be released in that document.?

If you believe that franchising is a path that you might want to take to business ownership, let's schedule a call.? I'll be happy to visit with you.