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Franchisor Services
The Franchise Disclosure Document (FDD) (Part A)
If you plan on starting a franchise in New York, you will have to provide potential franchisees with a franchise disclosure document (FDD). In this document, you will need to include specific disclosures which are mandated by federal law. There may also be disclosures that are required by the state.
To get specific information about the disclosures you'll need to include in your FDD, pursuant to state and federal requirements, you can consult with a New York franchise attorney that has experience helping clients draft effective FDDs.
General Rules for the FDD
According to the Federal Trade Commission (FTC), there are specific guidelines that you must follow when creating your Franchise Disclosure Document. These include that your FDD must be written in plain English, using short sentences, in the active voice, and it must include lists and charts wherever they may apply.
The FDD should not include legal jargon, highly technical terms, or multiple negatives. If your FDD appears too complicated for a potential franchisee to understand, a franchise examiner may reject it during the registration review. Essentially, the FDD should be written so that it is easily understood by the average layperson as well as a seasoned entrepreneur or business professional.
A New York franchise attorney can help you meet these writing guidelines.
The FDD Cover Page
There is specific information which you must include on the cover page of your FDD such as:
- Certain information that identifies you as the business franchisor (including your email address and primary Internet home page address);
- A sample of the primary trademark for the franchise;
- A brief description of the franchised business;
- The initial fees and total initial investment for the franchise;
- References to the FTC's website and its publication A Consumer's Guide to Buying a Franchise;
- An explanation of the 14-day delivery period; and
- Optional contact information for a prospective franchisee to obtain the FDD in different format.
Within the Franchise Disclosure Document, you will need to provide information about 4 key subjects. The information you provide must be accurate, up-to-date, and according to federal law. A New York franchise attorney can help ensure that you provide the necessary information required by law.
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