If you’re considering a franchise, it can be difficult to know where to start––especially when you’re handed documents you’re not familiar with.

When it comes to specific documents all prospective franchisees will work one way or another, The Franchise Disclosure Document (FDD) is one of the most important since it holds just about everything there is to know about the franchise.

In short, the better you understand what’s inside the FDD, the better prepared for everything that comes next. While no franchise can guarantee wild success, knowing what to look for in these documents allows to make a smarter, more complete assessment of the opportunity by using all the resources at your disposal.

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Starting a business from scratch is anything but easy in today’s market. Depending on your idea, your location and your finances, building a business from the bottom up can mean bending over backwards to deal with regulatory, technological, and operational challenges that stop many first time owners in their tracks.

To avoid these hurdles, many are turning to franchising instead. Unlike going it alone with a brand new business, franchisees are able to hit the ground running with a proven business model and the support from a corporate team that knows how their owners can reach success.

While franchising gives first time business owners many big advantages, it’s important to keep in mind that it’s not a free ticket to success. It’s crucial to make sure your business goals are in line with what the franchisor’s business model can provide, among other things. Read more

No matter what kind of franchise opportunity you’re considering, all franchisors are required by law to hand out a Franchise Disclosure Document (FDD) at least two weeks ahead of signing time.

In short, the FDD is a master guidebook to the business. Inside, you’ll find a wealth of information about the franchisor and the franchise organization along with the finer details of the opportunity itself.

While these documents are packed with info, it can be a dense read. To the first-time franchise buyer, flipping through page after page of lengthy text and legalese can be daunting.

This guide will help you step through each of the 23 sections or “Items” you’ll find inside. We’ll highlight the key sections to pay close attention to and point out potential FDD red flags to watch out for as well.

Let’s start at the very beginning:

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