FDD (Franchise Disclosure Document)

Definition

The document a franchisor must give you, covering fees, obligations, litigation, and territory.

Why It Matters

Buying a franchised business means inheriting the franchise agreement, and this document is where its real terms live: transfer fees, required refreshes, territory rights, and the franchisor's consent over your purchase. Read the litigation section and the franchisee turnover figures as carefully as the fees. A system where units change hands constantly is telling you something the average unit revenue will not.