As a franchisor‚ you are probably well aware of your obligation to properly disclose and deliver your FDD to prospective franchisees. However‚ too many franchisors and‚ even‚ franchise lawyers‚ fail to realize the ciritical significance of FDD updates and renewals. Sure‚ everyone is aware (at least‚ I hope) of the annual update and registration renewal process‚ however you may be required to update and re-register your FDD on a more frequent basis. The following are some update timelines you need to be aware of:
WHY DOES THIS MATTER – Because if your FDD is not both current and registered (in applicable states) you will be forever tainting your franchise sales process. Consider that your future right to “rescind” your franchise agreement and their obligation to pay royalties.
LEARN MORE: In the following video I discuss this topic and more in more detail.
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