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The Entrepreneur’s Source Shares Five Tips on Reviewing FDD’s

The Entrepreneur’s Source® helps aspiring franchisees tackle Franchise Disclosure Documents

Understanding the language and structure of Franchise Disclosure Documents (FDDs) is one of the most challenging tasks for aspiring franchise owners. Even those who are pursuing alternative careers to gain more control over their lives, and who have experience with franchise terminology and legal documents, may find a comprehensive FDD review difficult and overwhelming. No matter their comfort level, the process of reviewing an FDD can be intimidating for any prospect.

To assist franchise prospects in adopting a more strategic approach to the FDD review process, here are five quick tips to get you started.

Top 5 FDD Tips for First-Time Franchise Candidates

1. Expect Unknowns

FDDs can be overwhelming. You need a skilled guide. Connecting with a Career Ownership Coach at The Entrepreneur’s Source® can set you up for success by providing valuable insights on what to expect before meeting with a franchisor to review their FDD.

2. The Franchise Agreement is What Counts
Remember that the only binding document if/when you become a franchisee is the Franchise Agreement, not the FDD in its entirety. The FDD only summarizes certain provisions in the Franchise Agreement.

3. Take Time to Analyze Mission Critical Items
Focus your attention on items 1, 7, 12, 19 and 21 in the FDD as they describe mission critical components of the franchise opportunity, including the brand’s history and leadership team, required initial investment and the financial performance representation.

4. Always Ask Yourself, “What am I missing?
The key to successfully reviewing the Agreement is asking yourself, “What are my rights and obligations if I enter this agreement?” A Career Ownership Coach can provide guidance on what additional questions to ask the franchisor.

5. Under No Obligation
Understand that being asked to sign a receipt for an FDD does not bind you or obligate you to proceed with the investment.

If you have any questions regarding any of these tips or any other franchise matter, contact a A Career Ownership Coach at The Entrepreneur’s Source® franchise today. We can provide you the leadership and guidance that you need to help you uncover if an opportunity may be the right fit for your goals and aspirations. For more information on how a coach can help you better evaluate franchise opportunities, contact a coach today. https://entrepreneurssource.com/blog/contact/

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