{"id":5190,"date":"2016-04-04T10:47:58","date_gmt":"2016-04-04T15:47:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/smallbusiness\/starting-a-business\/franchise-agreement-questionnaire.html"},"modified":"2026-05-29T13:59:00","modified_gmt":"2026-05-29T18:59:00","slug":"franchise-agreement-questionnaire","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/franchise-agreement-questionnaire.html","title":{"rendered":"Franchise Agreement and Franchise Disclosure Document FAQ"},"content":{"rendered":"\n
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Franchise Agreement and Franchise Disclosure Document FAQ<\/h1>\n\n
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\n By Amber Sheppard, Esq.<\/a> | Legally reviewed by Catherine Hodder, Esq.<\/a>\n | Last updated\n
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Editorial Note: We earn a commission from affiliate partner links on FindLaw. Commissions do not affect the editorial integrity of our legal content.<\/p>\n\n <\/div>\n \n

\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

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A franchise disclosure document (FDD) is a legal document required by the Federal Trade Commission that a franchisor must provide to a prospective franchisee at least 14 calendar days before an agreement is made. It contains information about the business, litigation history, bankruptcy status, and estimated startup costs.<\/p>\n\n <\/div>\n\n\n\n

\u00a0<\/p>\n

Buying a franchise<\/a>\u00a0is a popular way to become a business owner. A\u00a0franchise business<\/span><\/a>\u00a0allows a franchisee (investor) to operate and run a well-known company (franchisor<\/span>) in exchange for a franchise fee<\/span>. The two parties enter into a\u00a0contractual relationship<\/a>\u00a0by signing a franchise agreement<\/span>.<\/p>\n

Before entering a franchise agreement<\/span>, you must read all the\u00a0franchise disclosure documents<\/span><\/a>. Read this FindLaw article to know what documents to look for when reviewing the terms of this agreement.<\/p>\n

Study the Franchise Disclosure Document<\/span><\/h2>\n

You\u2019ve found a franchise offer that you like, and you want to invest in it. You like the franchisor<\/span>\u2019s training program offers and business model<\/span>. By law, the\u00a0Federal Trade Commission<\/span> (FTC)<\/a>\u00a0has a Franchise Rule requiring the franchisor<\/span> to provide you with a franchise disclosure document<\/span> (FDD<\/span>).<\/p>\n

Study the disclosure document. Have an attorney and accountant review it with you, too.<\/p>\n

FDD<\/span> Timeline<\/h2>\n

Under the FTC\u2019s Franchise Rule<\/span>, you must receive the document at least 14 calendar days<\/span> before being asked to sign any contract or pay any money to the franchisor<\/span>. Some state laws<\/span> have\u00a0additional timelines along with the FDD<\/span> laws<\/a>. You should read the entire disclosure document. Make sure you understand all the provisions.<\/p>\n

Business Background<\/h2>\n

The FDD<\/span> identifies the executives of the franchise system<\/span> and describes their prior experience. Consider not only their general business background but also their experience in managing a franchise system<\/span>. Also, consider how long they\u2019ve been with the company. Investing with an inexperienced franchisor<\/span> may be riskier than investing with an experienced one who has experience doing business in the industry. There should also be contact information<\/span> for the company and previous franchisee owners.<\/p>\n

Litigation History<\/h3>\n

The FDD<\/span> tells you if the franchisor<\/span>, or any of its executive officers, has felony convictions involving:<\/p>\n