Updating the Franchise Disclosure Document- Identify the Changes

What happened last year? What changes do you want for next year? Under federal law the franchise disclosure document [FDD] must be updated no later than 120 days from the close of the franchisor’s fiscal year. 

Any information that is listed in the disclosure document can be considered material. By identifying the changes now, during the updating process, you will prevent having to amend the franchise disclosure document later. Amending the franchise disclosure document later, will cost you money and could delay the sale of your franchises and renewals!
Here are 20 questions to help your identify changes to include as part of the franchise disclosure document update process.
 

	Yes	No
1.  Have there been any changes in your business entity, parents, or affiliates?	_______	________
2.  Have there been any changes in the regulations or laws that affect the industry, which the franchise business operates?	_______	________
3.  Have you sued any franchisees or were any claims filed in court arbitration, bankruptcies, or governmental actions against you or any franchisor seller staff, directors, or officers?	_______	________
4.  Are there any updates to the litigation items listed in the franchise disclosure document?	_______	________
5.  Do you wish any changes in the initial franchise fees including discount on initial franchise fees?	_______	________

 

6.  Are there any changes to on-going fees charged franchisees?	_______	________
7.  Have there been a change in the franchisee initial investment costs?	_______	________
8.  Have you negotiated any new purchase arrangements on behalf of your franchisees or altered any required purchase arrangements?	_______	________
9.  Have you changed or begun offering any financing to the franchisees? such as promissory notes for pass due royalty fees or promissory notes for installment payments of initial franchise fee	_______	________
10.  Have you made any changes to the computer, equipment, or software that your franchisee must use or purchase?	_______	________

11.  Have you made any changes to your training programs or trainers?	_______	________
12.  Has there been any change in franchisor seller staff, directors, or officers?	_______	________
13.  Do you wish to make any changes to the franchisee obligations such as obligations to participate in the franchise business, authorized products or services?	_______	________
14.  Do you wish to make any changes to the franchise advertising requirements including local, national, or regional?	_______	________
15.  Have you registered any new trademarks or received notice of anyone else’s superior right to use of your marks?	_______	________
16.  Do you wish to provide or update an Item 19 Financial Performance Representation in your FDD?	_______	________
17.  Have you granted any waivers or discounts on fees, non-competes, other post termination obligations or other franchise obligations?	_______	________
18.  Do you wish any changes to the contracts and agreement?	_______	________
19.  Have there been changes to your operating manual?  Including the number of pages or changes to the table of content…	_______	________
20.  Are there any franchisee associations that need to be listed?	_______	________