Definition:
A Franchise Disclosure Document (FDD) is a legal document that gives you key details about a franchise before you sign anything. It includes 23 sections that explain things like the business model, fees, training, territory rights, and more.
The FDD helps you understand what you’re buying into. It protects you by showing the risks and rewards up front, so you can make a smart choice.
Use It in a Sentence:
Before joining CoolVu, you’ll receive a Franchise Disclosure Document (FDD) that clearly explains all the important business details.
Why Is a Franchise Disclosure Document Important?
The FDD gives you a full picture of the franchise. You’ll see what’s expected of you and what support the franchisor provides. It lays out startup costs, the royalty fee, and any other ongoing payments.
It also tells you about the company’s background, financial health, and any legal issues. That way, there are no surprises.
When you explore a franchise, reading the FDD carefully is a must. It helps you compare options and ask the right questions. CoolVu offers a clear, well-structured FDD to make this step easy.
The FDD helps you make decisions based on facts, not just promises. Take your time, ask questions, and even have a lawyer review it if needed. This document is key to starting your business the right way.
Related Dictionary Terms:
- Franchisee: Someone who buys the rights to run a business from a franchise brand.
- Franchise Agreement: A contract that outlines the official terms between the franchisor and franchisee.
- Royalty Fee: Ongoing payments made to the franchisor for continued support and use of the brand.
- Initial Franchise Fee: A one-time payment to start a franchise.
