Once you have filled out the franchisor’s questionnaire, the next step is normally for you to be given the legal disclosure document called the Franchise Disclosure Document (Also known as the FDD or disclosure document). If you meet the franchisor face to face, and you discuss the sale /or purchase of a franchise, you must, by law, be presented with this document at that meeting. 

The Federal Trade Commission (FTC) requires sellers of franchises and other business opportunity ventures to provide prospective investors with the information they need to make an informed investment decision.

All required information is given to prospective investors in the form of a franchise disclosure document, which must be furnished at least 14 business days before any purchase may occur. This document includes 20 important items of information, such as…

• Names, addresses and telephone numbers of other franchisees.
• A fully audited financial statement of the seller.
• The cost required to start and maintain the business.
• The responsibilities you and the seller will share once you buy a franchise.
• Litigation involving the company or its officers, if any.
• Again, use your professional support to examine all of these issues. Some of the contract terms may be negotiable. Find out before you sign; otherwise, it will be too late.

Read the documents CAREFULLY!  See if there are any deal breakers here.