Definition:
Item 16 in a Franchise Disclosure Document (FDD) explains what products and services a franchisee is allowed to offer. It also lists any restrictions on selling items outside the approved system. This section helps you understand what you can and can’t sell under the brand name.
Use It in a Sentence:
When Jake joined CoolVu, he read Item 16 of the FDD to understand which products he could legally sell under the brand.
Why Is Item 16 Important?
Item 16 of the Franchise Disclosure Document (FDD) explains what a franchisee is allowed to offer in their business. It outlines the approved products and services, like CoolVu’s window films, wall graphics, and architectural surfaces. It also highlights what a franchisee cannot sell, such as competing products or unapproved services.
This helps keep the brand consistent from one location to another. Customers know what to expect no matter which CoolVu franchise they visit. At the same time, franchisees stay focused on growing the business within the brand’s proven system.
It protects both the franchisee and the franchisor. When the rules are clear, there’s less confusion and fewer conflicts. For example, if CoolVu decides to launch a new product line, only approved franchisees can offer it—keeping it exclusive and valuable.
So, whether you’re thinking about owning a CoolVu franchise or already running one, knowing what’s in Item 16 is key. It helps you understand your rights, responsibilities, and limits as a business owner.
Related Dictionary Terms:
- Franchise Disclosure Document (FDD) – Legal summary.
- Item 1 in FDD: Identifies ownership, location, and business ties.
- Item 2 in FDD: Shows leadership experience behind the brand.
- Item 3 in FDD: Lists legal history and potential risks.
- Item 4 in FDD: Discloses past bankruptcies for review.
- Item 5 in FDD: Upfront startup fees listed.
- Item 6 in FDD: Lists ongoing fees for operating the franchise.
- Item 7 in FDD: Outlines estimated startup and operating costs.
- Item 8 in FDD: Lists supplier rules and product standards.
- Item 9 in FDD: Lists franchisee duties and responsibilities.
- Item 10 in FDD: Explains franchisor financing and loan options.
- Item 11 in FDD: Lists franchisor training, tools, and support.
- Item 12 in FDD: Explains territory rights and restrictions.
- Item 13 in FDD: Lists trademarks and legal protections.
- Item 14 in FDD: Covers patents, copyrights, proprietary info.
- Item 15 in FDD: Explains owner’s operational role.
- Item 17 in FDD: Renewal, transfer, & ending agreements rules.
- Item 18 in FDD: Shows public figures’ roles and ties.
- Item 19 in FDD: Shows sales numbers and earnings data.
- Item 20 in FDD: Tracks openings, closings, and transfers.
- Item 21 in FDD: Shows audited financial statements.
- Item 22 in FDD: Lists all required franchise contracts.
- Item 23 in FDD: Confirms receipt and starts 14-day wait.
