FDD Education
What Is Item 1 in an FDD? The Franchisor and Its Parents and Affiliates
Item 1 introduces the legal entity selling the franchise and the corporate family behind it. A factual guide to what it discloses and what it doesn't.
May 3, 2026 · 6 min read
What Is Item 10 in an FDD? Franchisor-Offered and Franchisor-Arranged Financing
Item 10 discloses any financing the franchisor or its affiliates offer or arrange. A factual guide to terms, rights, and what 'we offer no financing' means.
May 3, 2026 · 7 min read
What Is Item 11 in an FDD? Assistance, Advertising, Computer Systems, and Training
Item 11 is the longest item in most FDDs. A factual guide to what the franchisor is and isn't obligated to do for you before and after opening.
May 3, 2026 · 7 min read
What Is Item 12 in an FDD? Territory, Exclusivity, and E-Commerce Carve-Outs
Item 12 defines where you can operate and where the franchisor still can. A factual guide to exclusivity, reserved rights, and alternative channels.
May 3, 2026 · 6 min read
What Is Item 13 in an FDD? Trademarks, Registration Tier, and Defense Obligations
Item 13 discloses the brand assets you license. A factual guide to registration status, defense obligations, and modification rights in the FDD.
May 3, 2026 · 7 min read
What Is Item 14 in an FDD? Patents, Copyrights, and Proprietary Information
Item 14 covers the IP behind the brand: manuals, software, trade secrets. A factual guide to confidentiality obligations and post-termination limits.
May 3, 2026 · 7 min read
What Is Item 15 in an FDD? Obligation to Participate in the Operation of the Business
Item 15 tells you whether the franchisee has to run the unit personally or can hire a manager. A factual guide to what is disclosed and why it matters.
May 3, 2026 · 5 min read
What Is Item 16 in an FDD? Restrictions on What the Franchisee May Sell
Item 16 defines what the franchisee can and cannot sell, and who decides. A factual guide to product, channel, and customer restrictions in the FDD.
May 3, 2026 · 6 min read
What Is Item 17 in an FDD? Renewal, Termination, Transfer, and Dispute Resolution
Item 17 is the rules of the relationship: how it ends, how it renews, how you transfer it, and where disputes get decided. A factual guide to the table.
May 3, 2026 · 9 min read
What Is Item 18 in an FDD? Public Figures
Item 18 discloses whether a celebrity or public figure is paid to promote the franchise. A factual guide to what gets disclosed and what it means.
May 3, 2026 · 6 min read
What Is Item 2 in an FDD? Business Experience of Officers and Directors
Item 2 lists the people running the franchisor and their five-year work history. A factual guide to what it discloses and how to read it.
May 3, 2026 · 6 min read
What Is Item 20 in an FDD? Outlets and Franchisee Information
Item 20 is the most data-rich part of an FDD: five tables of unit counts, plus a roster of every franchisee. A factual guide to what it shows.
May 3, 2026 · 6 min read
What Is Item 21 in an FDD? Audited Financial Statements and Going-Concern Flags
Item 21 contains the franchisor's audited financials for the last three fiscal years. A factual guide to what's required and what to look for.
May 3, 2026 · 6 min read
What Is Item 22 in an FDD? The Contracts Exhibit Pack
Item 22 lists every contract a franchisee will be required to sign. The list is short; the exhibits behind it are typically 100+ pages.
May 3, 2026 · 6 min read
What Is Item 23 in an FDD? Receipts and the 14-Day Waiting Period
Item 23 is the legal trigger of the FDD. Signing the receipt starts the 14-day cooling-off period that must elapse before any contract or money.
May 3, 2026 · 6 min read
What Is Item 3 in an FDD? Litigation Disclosure and the 10-Year Lookback
Item 3 discloses the franchisor's litigation history over a 10-year window. A factual guide to what must be reported and how to read it.
May 3, 2026 · 6 min read
What Is Item 4 in an FDD? Bankruptcy Disclosure and the 10-Year Window
Item 4 covers bankruptcies of the franchisor, its corporate family, and its named officers within a 10-year window. A factual reading guide.
May 3, 2026 · 7 min read
What Is Item 6 in an FDD? Other Fees, Royalties, and Ongoing Costs
Item 6 lists every recurring fee a franchisee pays after opening — royalties, ad fund, technology, transfers, renewals. A factual guide to reading the table.
May 3, 2026 · 7 min read
What Is Item 8 in an FDD? Restrictions on Sources of Products and Services
Item 8 discloses required suppliers, approved-vendor lists, and rebates the franchisor collects from your purchases. A factual guide to what to look for.
May 3, 2026 · 7 min read
What Is Item 9 in an FDD? Franchisee's Obligations and the Cross-Reference Table
Item 9 is a navigation table pointing to where your obligations actually live in the franchise agreement. A factual guide to using it as a reading map.
May 3, 2026 · 6 min read
FDD Item 5 vs Item 7: Initial Fee vs Initial Investment
The two cost numbers in every FDD. A short, factual guide to what each one covers, why they aren't interchangeable, and how to read them together.
May 2, 2026 · 6 min read
How to Read FDD Item 19 (Financial Performance Representations)
Item 19 is optional, regulated, and the most-misread part of any FDD. A factual guide to what is actually being disclosed and what is not.
May 2, 2026 · 6 min read
What Is an FDD? A Plain-English Walkthrough of All 23 Items
A short, factual walkthrough of every item in a Franchise Disclosure Document, with the FTC Franchise Rule citations behind each one.
May 2, 2026 · 7 min read