Yes, an FDD may be disclosed electronically. Electronic disclosure includes delivery over the Internet and other electronic means provided that the FDD is directly conveyed to and received by the prospective franchisee. You should carefully review state-specific requirements for FDD electronic delivery and comply with the following FDD disclosure requirements published by NASAA:
(i) The FDD must be delivered as a single integrated document or file in a format that cannot be modified (such as a locked PDF);
(ii) The FDD, electronically delivered, must have no extraneous content beyond what is required to be disclosed in an FDD under the Federal Franchise Rule and state-specific franchise laws. However, electronic disclosure may include “customary devices for manipulating electronic documents in machine-readable form and tools or access to tools that may be necessary or convenient to enable the recipient to receive and view the disclosure document”;
(iii) The FDD has no links to or from external documents or content;
(iv) The FDD is delivered in a form that intrinsically enables the prospective franchisee to store, receive, and print it; and
(v) As franchisor, you must maintain records of the electronic delivery of your FDD to each prospective franchisee and you must be able to prove that the FDD was timely disclosed to each prospective franchisee in accordance with these electronic disclosure requirements.
When disclosing your FDD electronically, you must ensure that your records include an electronically signed FDD receipt page. You cannot deliver the Item 23 receipt page separately to your prospective franchisees. The Item 23 receipt page must be included as an integrated part of the electronically disclosed FDD and must provide for the prospective franchisee’s electronic signature and date. Your Item 23 receipt should include the names of “franchise sellers” involved in the franchise sale. The franchise seller are those individuals who were primarily responsible for the franchise sale.
Are you a franchisor or a part of a franchise sales team? Do you want to learn more about franchise sale compliance and ensure that your sales practices comply with franchise laws and are consistent with best practices? Then this guide is for you. In this guide you’ll learn the... read more
In this guide you’ll learn the basics of franchising, how to franchise your business, and how to win at franchising. We’ll also take a deeper dive into legal requirements for franchising and why they matter, steps to take before and after you launch your franchise, and even some tips on... read more
When considering expanding a business both franchising and licensing are possible options. In this guide, you'll learn the differences of franchising and licensing and understand how each will affect you. read more
Are you considering franchising your business? If so, its important to understand the advantages and disadvantages of franchising your business. Franchising is a legal and business model designed to achieve multi-unit expansion. Compared to organic expansion where you invest in and open multiple locations yourself, franchising allows you to recruit... read more
The documents to franchise your business include the franchise disclosure document (FDD), franchise agreement, operations manual, financial statements, and state specific registration applications. Below we discuss each franchise document in detail. 1. Franchise Disclosure Document Before you can offer or sell a franchise you are required to issue and disclose... read more
Franchising may be the next big step for your business and represents an opportunity to grow your brand. So, how do you know if franchising is right for you? How do you know if your business is franchisable and, if it is, whether or not you should franchise your business?... read more
In this webinar, Charles Internicola and Laura Meyer, founder of Joybrand Creative, talk about how to position your brand to win at franchise sales. Some topics include: How franchisors can develop their brand strategy How to differentiate your brand strategy between your targeted end-user customers and prospective franchisees for franchise... read more
In this webinar, Charles N. Internicola, Esq. and Lisa Welko, CFE of Integrity Franchise Group discuss what it takes to make your brand attractive to franchise brokers and sell to qualified franchisees. Selling franchises and building a durable franchise system - all comes down to being a "good franchisor," making... read more
Key strategies to accelerate franchise growth for startup and emerging franchisors In this webinar, franchise attorney Charles Internicola and Nick Powills, founder of No Limit Agency and 1851 Franchise, discuss key strategies to accelerate franchise growth through PR and digital media. Some topics include: Steps franchisors should take when it... read more
With services to make your growth strategy simple, cost effective, and with a team excited to help you, let’s talk about how we can help grow your business.
Fill out the following form and we’ll contact you as soon as possible. To reach our team directly, give us a call at (800) 976-4904.
An attorney client relationship is not established by submitting this initial contact information.