What is an FDD Franchise Disclosure Document?

Part 1 in a blog series from Brian Clark, STOP Restoration
As you search for the right franchise opportunity, you will learn new vocabulary. You'll hear words like Franchise Disclosure Document (or FDD for short). You'll hear about the "Items" (each followed by a number) contained therein. Some "Items" get more attention than others. Some items in a franchise disclosure document are boring while others contain a world of information, especially if you read carefully. This author strongly recommends that you READ THE FDD!

The question you must have is "what is an FDD franchise disclosure document?" A quick summary of the contents of an FDD includes the franchise name, the industry and products/services you will offer, the franchisor's name (the owners of the franchise brand), their history, whether or not they've been part of a bankrupt company, and their professional experience. Also contained are the details of costs to you, training, support, and each party's obligations under the franchise agreement.

In 1978, the Federal Trade Commission got in the middle of franchising. They implemented the requirement for franchisors to provide a disclosure document to help the public (franchise shoppers) get an organized, straight shot of information from franchisors regarding the franchise opportunity. The Franchise Disclosure Document was the landmark requirement among their franchise regulations (at the time was called the "UFOC," short for Uniform Franchise Offering Circular) .

There are timing requirements attached to Franchise Disclosure. A franchisor must provide a current FDD to all prospects by the sooner of either 14 calendar days before any money is exchanged or any signatures are put to contract or at the first personal meeting to discuss your buying a franchise. The 14-day period is in place to allow time for you and/or an attorney and/or accountant to review the franchise disclosure document.

Franchisors may disclose franchise shoppers with a hard copy of their FDD or by electronic file.

STOP Restoration is a cleaning and restoration franchise. Our franchises market and perform repairs to homes and buildings after water damage, smoke, fire and mold remediation. We are very excited to present our franchise disclosure document early in the discovery process. If you are interested in the lucrative restoration industry, you'll love our transparency...and our track record in systems and support.

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