What is FDD Item 21?
Franchise Disclosure Document Item 21 is the mandated FDD Item section that requires the disclosure of a franchisors financial statements. As a general rule (subject to certain limited exceptions for start-up franchisors) franchisors are required to disclose and include audited financial statements for the three most recent fiscal years.
These audited financial statements, include:
- Balance Sheet;
- Multi-Year statements of operation;
- Shareholders' Equity Statement; and
- Cash Flow Statements
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