When Must a Franchisor Update its FDD?

Under the FTC Franchise Rule a franchisor is required to continuously monitor and update its FDD. In addition to a franchisors primary obligation to update its FDD on an annual basis, the Franchise Rule also requires franchisors to issue quarterly updates to reflect material changes and to issue immediate updates to reflect a change in the franchisors financial performance representations. The three primary triggering events that dictate and mandate an FDD update, include:

  • Annual Update (Mandatory). Franchisors must update the disclosures contained in their FDD's no less frequently than "annually". Annual FDD updates must be completed within one hundred and twenty (120) days of the close of the Franchisor's fiscal year.
  • Quarterly Update (to Reflect Material Change). If a franchisor experiences a material change relating to the facts or circumstances underlying a disclosure contained in the FDD or a disclosure that should have been contained in the FDD, then the franchisor must "within a reasonable time after the close of the most recent quarter within the fiscal year" prepare revisions to be attached to the FDD.
  • Immediate Update (when Dealing with Financial Performance Representations). When providing a FDD to a prospective franchisee, Franchisors must immediately notify the prospective franchisee of any and all material changes known to the franchisor (or that should have been known to the franchisor) respecting any Item 19 financial performance representations.

For the franchisor carefully monitoring and updating your FDD, you must also recognize and account for state specific reporting and updating obligations. Internal control measures must also be implemented to ensure that you periodically identify, monitor and evaluate all substantive facts that may necessitate revisions to your FDD.

Legal Assistance for Updating Your FDD
To learn more about how we can assist you with FDD updates and compliance or for information about our nationwide Franchise Compliance Programs and Franchise Protection Programs contact franchise lawyer Charles N. Internicola by phone at 1-800-976-4904 or by email.



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IMPORTANT DISCLAIMER: The information contained on this website is provided for general educational purposes only, should not be relied on as legal advice and does not serve to create an attorney client relationship. In utilizing this website you acknowledge that there is no attorney client relationship between you and Charles N. Internicola, Esq. and that the information contained on this site does not and cannot serve as a replacement for the competent legal advice of a licensed attorney in your state. Further you acknowledge that any and all citations to cases and statutes must be independently verified by competent legal counsel to confirm the validity and accuracy of such information. The content of this site is subject to the Copyright of its author and owner, Charles N. Internicola, Esq.

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