What information is required in a franchise disclosure document.

 

A: Under the Federal Franchise Rule, a Franchisor's Franchise Disclosure Document ("FDD") must include the following twenty-three disclosures/items:

Item 1: The Franchisor and any Parents, Predecessors and Affiliates;
Item 2: Business Experience;
Item 3: Litigation;
Item 4: Bankruptcy;
Item 5: Initial Fees;
Item 6: Other Fees;
Item 7: Estimated Initial Investment;
Item 8: Restrictions on Sources of Products and Services;
Item 9: Franchisee's Obligations;
Item 10: Financing;
Item 11: Franchisor's Assistance, Advertising, Computer Systems and Training;
Item 12: Territory;
Item 13: Trademarks;
Item 14: Patents, Copyrights and Proprietary Information;
Item 15: Obligation to Participate in the Actual Operation of the Franchise Business;
Item 16: Restrictions on what the Franchisee may Sell;
Item 17: Renewal, Termination, Transfer and Dispute Resolution;
Item 18: Public Figures
Item 19: Financial Performance Representations;
Item 20: Outlets and Franchisee Information;
Item 21: Financial Statements;
Item 22: Contracts;
Item 23: Receipts




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