What You Need in a Franchise Disclosure Document… (and why it is important!)
What is an FDD (Franchise Disclosure Document)?
Opening a franchise is a challenge! You may already know the key elements, but the paperwork itself can be quite a lot. Let’s talk about the Franchise Disclosure Document, so that you know the details of that document and how to streamline your franchise into reality!
An FDD (Franchise Disclosure Document) is a list of terms. The list may seem daunting, but these terms are key to making sure both you and your franchise partner understand the franchise disclosure agreement before business begins.
There are several key components to a thorough franchise disclosure document.
Key elements of a franchise agreement include but are not limited to;
- Information on the franchisor. Who do they represent, any parent companies, and what is their mission statement?
- Experience. What experience does the franchisor have in providing their service or product?
- What happens in the event of litigation? A clear legal plan in the event of disputes is absolutely necessary!
- Opening fees & Exiting Fees. What fees are required, so you know what to expect from your franchiser?
- Obligations. What is ultimately expected of you to deliver to your franchiser to meet required goals and milestones.
- Restrictions. Any product source restrictions imposed by the franchiser should be clear and well communicated.
- Any financing? This section should outline any financing offered by the franchisor, with financing terms laid out clearly in no uncertain terms.
- Where is your territory? Clear boundaries of territory for your franchise should be made clear before beginning business, to avoid conflicts.
- Standing patents and copyrights. This section should outline all intellectual content that your franchisor owns.
- Actual obligations. Clearly outline your franchiser expectations of your personal involvement of running the business, your personal franchise.
A thorough FDD will include quite a few more points. However, this is only a brief example of the key points you will want to be sure that your FDD agreement will address to ensure that both you as a franchisee, as well as your franchise partner understand your business needs when launching a new, exciting franchise.
Best Examples of a Professional Franchise Agreement (with templates!)
Take a look at these top examples of effective franchise disclosure documents!
Concise wording and clear outlines put these samples of franchise agreements at the head of the pack!
A fantastic, simple outline of a healthy franchise disclosure document. Written in PDF from a major brand name business, this document is a solid example of exactly what you need to build your own bullet-proof franchise disclosure document.
FDDExchange.com can provide you with a plethora of franchise business resources. With a focus on providing professional quality franchise disclosure documents, FDDExchange.com is a prime resource for all of your franchise disclosure document needs.
The FDD Store is a one stop shop for franchise disclosure agreements, documents, and all other franchise documentation needs.
TheFDDStore.com provides an endless supply of needed documents to securely and legally begin your own franchise venture. Available in easy to use PDF format, TheFDDStore makes it simple to access and complete the documents you need for your next franchise venture, no matter the company with which you choose to begin business.
Local Resources (for California, Indiana, Minnesota, and Wisconsin)
If you are a resident of any of these four listed states (California, Indiana, Minnesota, and Wisconsin) you can benefit from the services of DrummLaw.com.
DrummLaw.com is a virtual law firm that provides quality service to each and every client. With a focus on virtual service, DrummLaw champions themselves on communication as a top priority! Whether that means a Skype video call, FaceBook message or LinkedIn message. DrummLaw puts their clients first, and quality service requires constant communication to meet up to the minute client needs.
The Bottom Line
Launching your new franchise can seem like quite a lot of steps. Detailed franchise disclosure documents, learning new marketing, and setting clear terms with the franchiser – it can all be easily overwhelming. However, you are already on the right path. Utilizing the resources provided here, you can easily find the right franchise disclosure documentation you need in order to lay out a clear, beneficial franchise agreement.
With these tools in mind you can make certain that your franchise has a strong head start, both legally and locally!
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