Documents to Start a Franchise | Internicola Law Firm

Documents to Start a Franchise

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 a franchise disclosure document (FDD) to the individuals that you are offering your franchise to and who may eventually sign a franchise agreement and become your franchisee. The FDD is a legal document that includes 23 disclosure items that require the disclosure of specific information about you, your franchise offering, and the legal obligations between you and your franchisees. As a legal document the FDD must comply with the federal and state franchise laws and should be prepared by a franchise lawyer.

2. State Disclosure Documentation: Franchise Registration States

Depending on where you intend to offer and sell franchises, there are certain states known as the Franchise Registration States  that have enacted their own franchise requirements and require special supplements to the FDD, prepare additional documents, and register your FDD with a local state administrator. The additional state documents include state specific amendments to your FDD and state specific FDD registration forms and disclosures. Many states follow a uniform franchise registration form process as published by the North American Securities Administrators Association (NASAA), including this list of state registration forms.

3. State Disclosure Documentation: Franchise Filing and Notice States

In addition to the registration forms needed for the franchise registration states discussed above, certain other states known as franchise filing states require that you file a form notifying the state that you will be selling franchises within the state or that you are claiming an exemption to local state business opportunity laws. Visit our interactive franchise registration map to learn more about the franchise registration and franchise filing states including state specific requirements.

4. Operations Manual

Not technically a legal document but equally important to your FDD is the confidential franchise operations manual. The operations manual is a confidential document that you will provide to your franchisee after he or she signs a franchise agreement. The operations manual will serve as the how-to guide for your franchisees and cover everything from your initial training program through the standards and requirements for the development and day to day operations of the franchised business. Operations manuals are intended to evolve and be supplemented over time as your system standards evolve and change over time. In the past operations manuals typically took the form of printed manuals but today they are evolving into digital cloud based documents that are interactive and include videos.

5. Financial Statements

Within your FDD you must include financial statements for your franchise company. If you are new to franchising and your franchise company is new then the financial statements will be limited to an opening balance sheet for your new franchise company. However, over time these financial statements must evolve into fully audited financial statements that include Statement of Operations, Balance Sheet, and  Statement of Cash Flows.

Getting Started – Franchise the Right Way

To learn more about franchising your business, the documents involved and how we can help. Contact us at (800) 976-4904, live chat, or by email. Learn more about our fixed fee Franchise Launch Program that combines legal representation + franchise development know-how to help you franchise the right way.

Let's Talk

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 brand. Click on the button below or call us at (800) 976-4904.

Top Resources for Franchising Your Business

  • videoImg

    Franchise Sales Compliance Guide

    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

  • videoImg

    The Ultimate Guide to Franchising Your Business

    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

  • videoImg

    Franchising vs. Licensing

    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

all guides

  • None right now

all videos

  • videoImg

    Franchising Your Business: Advantages & Disadvantages

    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

  • videoImg

    Documents to Start a Franchise

    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

  • videoImg

    Is Your Business Franchisable and Should You Franchise?

    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

all articles

  • videoImg

    Positioning Your Brand to Win at Franchise Sales

    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

  • videoImg

    How to Work With Franchise Brokers and Sell Franchises

    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

  • videoImg

    Leveraging PR & Digital Media to Jumpstart Franchise Sales

    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

all webinars

Let’s Talk

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.

closeIcon