The Franchise Disclosure Document (FDD) Requirements (Part A)

When drawing up your franchise disclosure document (FDD), there are various items that are required by the Federal Trade Commission (FTC). If you need help providing these items in the FDD, you can contact an experienced New York franchise attorney.

Here is a list of some of the items required in the FDD, and the information you will need to include.

Item 1: The Franchisor and Any Parents, Predecessors, and Affiliates

In Item 1 of the franchise disclosure document, you must basically describe the franchise which you are offering, along with information regarding the franchise's products and/or services. You must also include information about your business predecessors and affiliates, as well as any parent entities.

Item 2: Business Experience

In Item 2 of the franchise disclosure document, you must disclose the names and positions of your directors, your principal officers, and other individuals who have management responsibility related to the franchise business.

Items 3 & 4: Bankruptcy and Litigation History

In Items 3 & 4 of the franchise disclosure document, you must include the history of any bankruptcies or litigation that your business has experienced.

Item 5: The Initial Franchise Fees

In Item 5 of the franchise disclosure document, you must disclose the initial fees required to start a new franchise. This will include all payments and commitments to pay for goods and/or services, as well as the standard initial franchise fee. It will also include information about payments for:

  • inventory;
  • software license fees;
  • rent;
  • employee and management training; and
  • advertising.

In the FDD, you must also disclose the conditions under which payments or fees may be refundable. To ensure that you provide the right information, you can have a New York franchise attorney review your franchise disclosure document.

A New York franchise attorney can even help you write your FDD, and also make sure that you provide it in a professional and timely manner.

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