FDD Review Checklist

Item 1: The Franchisor and Any Parents, Predecessors, and Affiliates

Background information on the franchisor's corporate structure, history, and business experience.

Item 2: Business Experience

Biographical and professional background of the franchisor's directors, officers, and key executives.

Item 3: Litigation

Current and past lawsuits involving the franchisor, its officers, and directors.

Item 4: Bankruptcy

Bankruptcy filings by the franchisor, its affiliates, officers, or directors.

Item 5: Initial Fees

All fees and payments due before opening, including franchise fee, training fees, and other upfront costs.

Item 6: Other Fees

Ongoing fees including royalties, advertising fund contributions, technology fees, and transfer fees.

Item 7: Estimated Initial Investment

Itemized list of all costs to open and operate during the initial period.

Item 8: Restrictions on Sources of Products and Services

Required and approved suppliers, including whether the franchisor profits from supply chain.

Item 9: Franchisee's Obligations

Table summarizing all obligations of the franchisee under the franchise agreement.

Item 10: Financing

Any financing arrangements offered or arranged by the franchisor.

Item 11: Franchisor's Assistance, Advertising, Computer Systems, and Training

Pre-opening and ongoing support, training programs, and technology requirements.

Item 12: Territory

Whether you receive an exclusive or protected territory and the conditions.

Item 13: Trademarks

Status of the franchisor's trademarks and your rights to use them.

Item 14: Patents, Copyrights, and Proprietary Information

Any patents, copyrights, or trade secrets that are part of the franchise system.

Item 15: Obligation to Participate in the Actual Operation of the Franchise Business

Whether you must personally manage the business or can hire a manager.

Item 16: Restrictions on What the Franchisee May Sell

Limitations on products and services you can offer.

Item 17: Renewal, Termination, Transfer, and Dispute Resolution

Conditions for renewing, ending, selling, or resolving disputes about your franchise.

Item 18: Public Figures

Any celebrities or public figures involved in the franchise system.

Item 19: Financial Performance Representations

Earnings claims or financial performance data (optional for franchisors to include).

Item 20: Outlets and Franchisee Information

Tables showing system size, openings, closings, transfers, and contact info for current/former franchisees.

Item 21: Financial Statements

Audited financial statements of the franchisor for the past 3 years.

Item 22: Contracts

Copies of all agreements you will be asked to sign.

Item 23: Receipts

Acknowledgment that you received the FDD at least 14 calendar days before signing or paying.