Understanding the Disclosure Document - FDD

Uniform Federal Disclosure Document (UFFD or FDD), formerly known as the Uniform Federal Offering Circular, (UFOC) provides prospective franchise traders with details about a potential franchise. Company history, history, risks and financial claims are only a couple of from the products covered.

To safeguard and inform the investor, the Ftc (Federal trade commission) figured that a standardized disclosure should be in position for businesses to provide their companies like a franchise. Since the format is standardized, it can make for simple side-by-side evaluations between companies.

The FDD is supplied to potential traders of franchises. Meaning this document is generally provided to prospective traders who've made efforts to be eligible for a any particular franchise. Often a dialog continues to be established between your investor and also the franchisor prior to the FDD is asked for.

Concerning the format from the FDD. It includes cover pages, table of contents, primary body and exhibits.

The coverage pages are straight-forward. They retain the name, address, contact details and fundamental business information. Additionally, it stresses the way the FDD ought to be used and what to do for further help. There's additionally a condition cover page which notifies the investor that there might be condition franchise laws and regulations. Furthermore there's a paragraph on Risks. El born area highlights potential risks natural within the particular investment.

The table of contents simply list the products which make from the body and exhibits from the FDD.

The primary area of the FDD is composed of twenty-three products.

Item

1: The Franchisor and then any Parents, Forerunners and Affiliates Item

2: Business Experience Item

3: Lawsuit Item

4: Personal bankruptcy Item

5: Initial Franchise Fee Item

6: Other Charges Item

7: Believed Energy Production Item

8: Limitations on Causes of Items and Services Item

9: Franchisee's Obligations Item

10: Financing Item

11: Franchisor's Assistance, Advertising, Personal Computers and Training Item

12: Territory Item

13: Trademarks Item

14: Patents, Copyrights and Proprietary Information Item

15: Obligation to Have fun playing the Actual Operation from the Franchise Business Item

16: Limitations on which the Franchisee May Sell Item

17: Renewal, Termination, Transfer and Dispute Resolution Item

18: Politicians Item

19: Financial Performance Representations Item

20: Outlets and Franchisee Information Item

21: Financial Claims Item

22: Contracts Item