The Federal Trade Commission (FTC), requires that you receive a Franchise Disclosure Document (FDD) from the franchisor at least 14 days before you are asked to sign the franchise agreement. These documents can often run to hundreds of pages. While the FDD is drafted by attorneys, it is not written for a legal audience. Instead, it is designed to be easy to understand. Of course, this lengthy document can still be intimidating.
The good news is that all FDDs follow the same format set forth in the FTC's Franchise Rule. Available for download is a summary of the 23 Items that all FDDs contain. Our guide includes a brief description of the contents of each Item and red flags to consider. For the full text of the Franchise Rule, you can visit the FTC website here.