What is a Franchise Disclosure Document (FDD)?
The Franchise Disclosure Document (FDD) is the legal disclosure every US franchisor must give a prospective buyer at least 14 days before any signing or payment. Required by the FTC Franchise Rule, it runs 23 numbered items covering fees, the initial investment, litigation, financial statements, contracts, and unit turnover. It is disclosure, not a contract — the franchise agreement you actually sign is attached to it as an exhibit.
Triage the 23 items instead of reading front to back: Items 5–7 are the money in (fees and the full investment table), Item 8 shows whether the franchisor profits on required purchases, Item 12 defines territory, Item 17 tables term and termination, Item 19 is the only lawful earnings information, and Item 20 is unit turnover plus the franchisee contact lists you'll use for validation calls.
The FDD updates annually (within 120 days of the franchisor's fiscal year-end), so check the issuance date — a December decision read against a stale FDD is a due-diligence gap. Our franchise agreement guide covers the contract that rides along as an exhibit.