The Franchise Disclosure Document is one of the most important resources your franchise will ever produce – trust us, over the years, we’ve created many. Not only in our capacity as a franchise consulting firm that helps develop these documents for others but also as part of United Franchise Group (UFG). UFG owns many thriving franchise brands such as Signarama, and as such, we understand firsthand the importance of creating Franchise Disclosure Documents that are thorough and transparent – both for our benefit and our franchisees.
Whether you’re a new franchisor or are well-established, keeping your Franchise Disclosure Document up-to-date is crucial. Learn why, along with a few tips, here.
Why Does My Franchise Disclosure Document Need to be Thorough?
The obvious answer is: to protect your brand. The Franchise Disclosure Document is legally binding, so franchisees have a right to expect the resources and terms that are laid out in them. If you introduce a new fee structure or change your training and support program, your Franchise Disclosure Document needs to be updated immediately; so that prospective franchisees clearly understand what they’re getting. Once they’ve signed their franchise agreement, it’s up to you to live up to those terms. Miscommunications can cause disappointment, and even worse, lead to legal ambiguity.
When you partner with Accurate Franchising, Inc., we’ll review your Franchise Disclosure Document to ensure that it’s free of loopholes. As we help you develop your franchise, we can also ensure that it stays up-to-date.
What Parts of the Franchise Disclosure Document are Most Important?
Realistically, all of it is important. Each word counts, and it requires careful review. That being said, the Franchise Disclosure Document allows you to showcase the best parts of your franchise opportunity. There are a few sections where adding lots of detail is especially valuable.
Item 7: Estimated Initial Investment
Franchisees always want to know how much it costs to get their business started. Developing an accurate estimate is a great way to get their attention while keeping their expectations realistic.
Item 11: Franchisor’s Assistance, Advertising, Computer Systems, and Training
Perhaps the main reason people choose to franchise rather than go it alone is the support they can expect. Be sure to put all of your essential training and support resources into this section.
Item 19: Financial Performance Representations
This part of the document, where franchisors can discuss real franchisee performance, is optional. Because not all franchisees report earnings in the same way exactly, this section is hard to regulate. With that noted, prospective franchisees are especially interested in how much revenue actual locations produce.
Let Accurate Franchising, Inc. help you develop your Franchise Disclosure Document so that it’s compelling as well as informative. Contact us today to get started.