Franchise FDD checklist: what a buyer actually reads
Independent editorial site. Educational only. We do not sell franchises and are not a franchise broker. This is not an offer. Read the FDD and hire your own lawyer and CPA.
Answer first
An FDD is the franchisor's disclosure document under the FTC Franchise Rule. Buyers actually read litigation (Item 3), financial performance representations if any (Item 19), and outlet counts and closures (Item 20), then the contracts. This is not an offer and not a substitute for counsel.
| Item | Why buyers open it |
|---|---|
| 3 · Litigation | Who is suing or being sued |
| 19 · Financial performance | Whether any earnings claim exists, and its limits |
| 20 · Outlets | Openings, transfers, closures |
| Contracts / exhibits | What you would actually sign |
Use the FTC consumer materials. Then hire counsel. See pay models.
Questions asked in this shape
What is an FDD?
The Franchise Disclosure Document required by the FTC Franchise Rule before a franchise is sold, with state overlays in registration states.
Is Item 19 a promise I will earn that?
No. If Item 19 exists it is a financial performance representation with defined limits. Many FDDs omit one. Your CPA should read it.
Do you sell franchises?
No.
Sources
- FTC Franchise Rule consumer guidance (accessed 22 Aug 2026)
- NASAA (state franchise registration context) (accessed 22 Aug 2026)