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MGT 347: Franchising: Getting Started

Franchise Disclosure Document

The Federal Trade Commission requires all franchisors to provide information to potential franchisees.   According to the FTC website: 

16 CFR Parts 436 and 437

RULE SUMMARY:

The Franchise Rule gives prospective purchasers of franchises the material information they need in order to weigh the risks and benefits of such an investment. The Rule requires franchisors to provide all potential franchisees with a disclosure document containing 23 specific items of information about the offered franchise, its officers, and other franchisees.

 

LOCATING THE FRANCHISE DISCLOSURE DOCUMENT

If you were going to purchase a franchise opportunity, you would need to get the Franchise Disclosure Document directly from the franchisor.  These often cost money.  To get a free version to review, you can try searching a state government website, such as the Wisconsin Department of Financial Institutions or the Minnesota Department of Commerce.  Here's a great article about searching these sites: http://franchisealchemy.com/how-to-get-free-fdds/  

 

Director, MCOB Business Library

Amia Baker's picture
Amia Baker
Contact:
MCOB Library
University of South Alabama
5811 USA Drive South, Room 240H MLRC
Mobile, AL 36688
(251) 460-7998
Website / Blog Page
Subjects:Business