franchise FDD explainer
Last updated: August 25, 2026
Items buyers open first
| Item | What it covers | Buyer use |
|---|---|---|
| Item 3 | Litigation | Pattern of franchisee disputes |
| Item 5 | Initial fees | What you pay before opening; broker payments when disclosed |
| Item 7 | Estimated initial investment | Low/high ranges the franchisor printed, including working capital |
| Item 17 | Renewal, termination, transfer, disputes | How hard it is to exit or transfer |
| Item 19 | Financial performance representations | Blank means the franchisor made no FPR in the FDD |
| Item 20 | Outlets and franchisee contacts | Compare openings to terminations and non-renewals; call the list |
| Item 21 | Franchisor financial statements | Have an accountant read them |
| Item 22 | Contracts | The franchise agreement you would actually sign |
The FTC Consumer's Guide tells buyers to read each of the 23 numbered “Items”. Cite: Consumer's Guide to Buying a Franchise. Rule: 16 CFR Part 436.
Public FDD search (no registration-state count on this page): California DFPI, Minnesota CARDS, Wisconsin DFI.
/fdd-explainer/ 308s here. Related: franchise consultant cost.
SOURCE-PRINT
Counts and rule cites on this page are substrings that printed on the cited FTC URL on 25 Aug 2026. This site ships no consultant dollar and no commission percentage.
| Claim | URL | Printed substring |
|---|---|---|
| FDD at least 14 days before sign or pay | ftc.gov/business-guidance/resources/consumers-guide-buying-franchise | at least 14 days before you are asked to sign |
| FDD has 23 numbered Items | ftc.gov/business-guidance/resources/consumers-guide-buying-franchise | 23 numbered “Items” |
| FTC Franchise Rule is 16 CFR Part 436 | ftc.gov/legal-library/browse/rules/franchise-rule | 16 CFR Part 436 |
Frequently Asked Questions
What is a Franchise Disclosure Document?
The Franchise Disclosure Document (FDD) is the disclosure franchisors must give prospective franchisees before any agreement is signed or payment is made. The FTC Consumer's Guide to Buying a Franchise tells buyers to read each of the 23 numbered “Items”.
How long before signing must a franchisor provide the FDD?
The FTC Consumer's Guide to Buying a Franchise states that you must receive the document at least 14 days before you are asked to sign any contract or pay any money to the franchisor or an affiliate of the franchisor. Do not waive that waiting period.
How should buyers read FDD Item 20 outlet tables?
Compare openings, terminations, and non-renewals on the Item 20 table the franchisor printed. Heavy terminations or non-renewals relative to openings is a walk-away signal. Call current and former franchisees listed in Item 20. The Franchise Rule does not set a single closure-rate percentage.
Where did /fdd-explainer/ go?
https://franchisebuyersdesk.com/fdd-explainer/ is a 308 to this stored prompt. The H1 is franchise FDD explainer.