Franchise disclosure document

DEFINITION of 'Franchise disclosure document'

The Franchise Disclosure Document (FDD) is a legal disclosure document that must be given to individuals interested in buying a U.S. franchise as part of the pre-sale due diligence process. It contains information essential to potential franchisees about to make a significant investment, such as financial disclosures, litigation history, fees and expenses, estimated initial investment, approved suppliers, obligations of the frachisee, territory, financial performance representations and expectations, list of outlets, financial statements, contacts, key public figures and more. Information about the FDD and franchising can be found on the FTC's Bureau of Consumer Protection web site here.

BREAKING DOWN 'Franchise disclosure document'

The FDD was previously known as the Uniform Franchise Offering Circular (UFOC) before it was revised by the Federal Trade Commission in July 2007. It has also been known as the uniform franchise disclosure document.