The Franchise Disclosure Document (FDD) is 200+ pages of legal disclosure — but only 5 items really matter. Most prospective franchisees either don't read it at all, or they read every word and miss the forest for the trees. This guide walks through the FDD items that actually matter, what red flags to look for, and how to use the FDD to make a smart investment decision.
The Bottom Line
The FDD is not a marketing document — it's a legal disclosure designed to protect the franchisor, not you. The items that matter most are Item 19 (financial performance), Item 20 (turnover), Item 3 (litigation), Item 7 (initial investment), and Item 6 (fees). Read those five items carefully, talk to current and former franchisees, and never rely on the franchisor's projections alone. The FDD tells you what the franchisor is legally required to disclose — not what they want you to know.