Franchise disclosure document (FDD)
Create a Compliant, Powerful FDD That Sets Your Franchise Up for Growth
Creating a compliant and effective FDD is one of the most critical steps in franchising your business. We’ll help you do it right.
Start Building Your FDD Today
What is the Franchise Disclosure Document?
One of the most important franchise documents that your business will need is the Franchise Disclosure Document, or FDD. This legal document is required by the Federal Trade Commission (FTC) and must be presented to individuals interested in buying your franchise.
The purpose of the FDD is to provide detailed information to potential franchisees so that they can make an informed decision before investing in your business.
- Your FDD will contain information about:
- The franchise opportunity
- Your obligations as a franchisor
- The obligations of your franchisees
- Financial information about your business
This document allows your franchisees to evaluate your franchise honestly and helps to protect both you and your investors.
What Does the FDD Include?
We ensure your FDD covers everything required by law and structured to protect your business.
Business Overview
Detailed explanation of your franchise opportunity, company background, and brand structure.
Franchisee & Franchisor Obligations
Clarifies what you are responsible for providing—and what franchisees must do in return.
Fee & Investment Information
Breakdown of all initial fees, ongoing royalties, marketing contributions, and required startup costs.
Financial Representations & Legal Disclosures
Includes optional performance representations (Item 19) and mandatory legal details like litigation history, trademarks, and audited financials.
We’re With You After the First Draft
Your FDD must be updated annually and may require adjustments as your business evolves. We help franchisors:
Update and renew their FDDs annually
Adjust Item 19 disclosures
Comply with registration/filing requirements in key states
Coordinate with legal counsel for smooth renewals
Our FDD Creation Process
Whether you’re building your FDD from scratch or updating your current one, we provide a clear process to make it efficient, accurate, and legally sound.
Step #1
Initial Consultation & Data Collection
Step #2
Legal Drafting & Financial Coordination
Step #3
Review and Compliance Check
Step #4
FDD Finalization + State Filings
Step #5
Annual Updates & Ongoing Support
Common FDD Mistakes to Avoid
A poorly constructed FDD can delay franchise sales—or worse, expose you to legal risk. Our team helps you avoid the most common mistakes franchisors make when drafting or filing their documents.
Including misleading or outdated financial data
Failing to update annually within 120 days of fiscal year-end
Inconsistent franchisee obligations across the FDD and Agreement
Using templated language that doesn't fit your business model
Not working with qualified franchise legal advisors
FDD Creation with Real-World Franchise Experience
At Accurate Franchising, we help you create a comprehensive, legal, and effective FDD. Our team has years of experience creating FDDs that are up-to-date, compliant with current franchise laws, and structured to clearly explain your business. We work hand-in-hand with franchise attorneys and consultants to ensure your document is accurate and easy to understand.
What’s Inside the FDD? A Breakdown of All 23 Required Items
Every FDD must include these disclosures as mandated by the FTC. Here’s what your future franchisees will see.
The Franchisor and Any Parents, Predecessors, and Affiliates
Overview of your company, history, and ownership structure.
Business Experience
Backgrounds of key executives and franchise leadership.
Litigation
Any relevant lawsuits involving the franchisor or leadership.
Bankruptcy
Disclosure of any bankruptcies related to the franchisor or key individuals.
Initial Fees
All upfront costs the franchisee must pay to the franchisor.
Other Fees
Ongoing or additional fees (e.g., royalties, tech fees, marketing fees).
Estimated Initial Investment
Total cost to open and operate a franchise for the first 3 months.
Restrictions on Sources of Products and Services
Any approved or required suppliers the franchisee must use.
Franchisee’s Obligations
Legal and operational responsibilities of the franchisee.
Financing
Any financing options offered by the franchisor.
Franchisor’s Assistance, Advertising, Computer Systems, and Training
Overview of the support provided before and after opening.
Territory
Explanation of territory rights and whether they are exclusive.
Trademarks
Details of the franchisor’s trademarks and legal status.
Patents, Copyrights, and Proprietary Information
Intellectual property included with the franchise.
Obligation to Participate in the Actual Operation of the Franchise Business
Legal and operational responsibilities of the franchisee.
Receipts
A form the franchisee signs to confirm receipt of the FDD.
Renewal, Termination, Transfer, and Dispute Resolution
Legal rights and procedures regarding the franchise agreement lifecycle.
Public Figures
If any celebrities or influencers are involved in promoting the brand.
Financial Performance Representations (Optional)
Historical earnings data, if the franchisor chooses to disclose it.
Outlets and Franchisee Information
Number and location of outlets, transfers, closures, etc.
Contracts
All agreements the franchisee will be required to sign.
Restrictions on What the Franchisee May Sell
Limitations on product/service offerings.
Financial Statements
Audited financials from the past three years.
Do You Need to Register Your FDD in Your State?
Certain states require additional registration or filing before you can offer franchises. We help franchisors understand their state’s requirements and manage the process from start to finish. These states require your FDD to be reviewed and approved before you can offer or sell franchises there:
California
Hawaii
Illinois
Indiana
Maryland
Michigan
Minnesota
New York
North Dakota
Rhode Island
South Dakota
Virginia
Washington
Wisconsin
These states don’t require registration but do require you to file a copy of your FDD or a notice before offering/selling:
Connecticut
Florida
Kentucky
Nebraska
North Carolina
South Carolina
Texas
Utah
This All Important Document Gives Your Prospects Vital Information
Writing, updating, and distributing the franchise disclosure document, or FDD, is a key part of growing your business with new franchise locations. This important legal document is chock full of information that your franchise partners need to know before they invest in your brand. The experts at Accurate Franchising can help you compile the data into your FDD so that it covers every required point and shows your prospects why yours is a great brand.
Yes, if you plan to franchise your business in the U.S., you are legally required to have a Franchise Disclosure Document (FDD). This document, mandated by the FTC, must be provided at least 14 days before any agreement or payment and includes key information about your franchise to help prospective franchisees make informed decisions.
You must provide the FDD at least 14 days before signing any agreement or receiving any payment from a prospective franchisee.
The FDD contains 23 required items, including details about the franchisor’s background, fees, legal obligations, financial performance, and operational guidelines.
The FDD must be updated annually and whenever there are material changes affecting the franchise offering.
While U.S. law requires an FDD for domestic franchising, international markets have varying requirements, and Accurate Franchising can help you navigate the specific legal needs for each country.
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