franchise disclosure document (fdd)

What Should Prospective Franchisees Look For in an FDD?

Prospective franchisees should carefully review the FDD, paying particular attention to the following:
Franchisor's background and experience (Item 2)
Litigation history (Item 3) and bankruptcy (Item 4)
Initial and ongoing fees (Items 5 and 6)
Estimated initial investment (Item 7)
Franchisee's obligations (Item 9)
Franchisor's support (Item 11)
Territory (Item 12)
Financial performance representations (Item 19)
Financial statements (Item 21)

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