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Dear Nick,
What is a FDD?
Eld
Eld,
The FDD, Franchise Disclosure Document, is a document of disclosure required by the
FTC of all franchisors that provides prospective franchisees
a fair opportunity for studying the investment before
buying. It is routinely given to prospective franchisees
by the franchisor once the franchisor is satisfied that
the prospect is qualified (at least financially) to purchase
the franchise.
Of great importance is the fact that
the FDD contains a listing of all current (and recently
departed) franchisees. Why is this so important? Because
the prospect can contact as many franchisees as desired
to get their perspective on the franchise and the franchisor's
performance. In other words, the FDD is really a key
to due diligence.
Regards,
Nick
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