The Franchise Disclosure Document Explained: Key Items Every Buyer Should Know

Thinking about buying a franchise? Before you sign, you will be handed a Franchise Disclosure Document that can be hundreds of pages long. It’s overwhelming, but understating it is critical.

In this video, Gary Remer, shareholder at Maddin Hauser and head of the firm’s Franchise Practice Group, breaks down the most important sections you need to know, including:

• Item 5 – Initial Fees: What it costs to enter the franchise system.
• Item 6 – Ongoing Fees: Royalties, advertising contributions, and other recurring payments.
• Item 7 – Initial investment: The full cost to open, from rent and equipment to working capital.
• Item 12 – Territory: How your protected area is defined and why it matters.
• Item 19 – Financial Performance Representations: How franchisors provide earnings data.

Whether you’re exploring your first franchise or expanding into multiple units, this guide will help you spot red flags and make informed decisions before investing.

Learn more: https://maddinhauser.com/practices/franchise-distribution/

Contact information: If you have any questions or need additional information, please reach out to me, Gary Remer, at gremer@maddinhauser.com and https://maddinhauser.com/people/gary-m-remer/

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