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Franchise Law FAQ

What are Franchise Offering Documents?

If you are thinking of buying a franchised business, you will be presented with a disclosure document that should conform to the requirements of the Federal Trade Commission. The document is referred to as the Franchise Disclosure Document (FDD) formerly known as the Uniform Franchise Offering Circular or UFOC. The FDD will give you information about the history of the people involved in the franchise, what the franchisor says they will do for you, how much it will cost to get started with them, how much you will pay in royalties to be part of the franchise system. In addition, a number of the states have their own version of franchise laws. Therefore the FDD also must comply with those state laws if the franchisor is selling franchises in those states. It is important to have someone familiar with the various requirements to go through the FDD to point out issues you should be aware of before you sign this multi-year agreement.