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What Information Is Contained In FDD Item 6?

Franchise Disclosure Document Item 6 is titled "Other Fees". This FDD disclosure section contains information that should include on-going basis to be incurred by franchisees. These fees / on-going expenses are important for franchisees to evaluate (and for franchisors to properly prepare) since these "fees" will have a direct impact on franchisee financial performance.

If you are evaluating the purchase of a franchise, among many other due diligence steps, you must evaluate the impact of Item 6 recurring fees (i.e., like your obligation to pay a continuing royalty) on the weekly, monthly and annual financial performance of your future franchised business. Learn more about other due diligence factors to consider: order a complimentary copy of "An Entrepreneurs Guide to Buying a Business".

Charles Internicola

by Charles Internicola
National Business and Franchise Lawyer

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