If you are looking to prepare an FDD or franchise disclosure document, you are well advised to learn about the benefits of using an FDD template and a database of existing FDDs. Knowing them will help you make informed decisions about putting your franchise document kit together.
The FDD helps potential franchisees to understand the risks, benefits, and responsibilities involved in buying franchising rights for a particular franchise. From the franchisor’s perspective, it is an important document as it describes his or her legal responsibilities as well as the protections that will come into play should the franchise relationship go bad.
The Primary Benefits of Using an FDD Template
An FDD must cover 23 subjects in total. Hence, one of the benefits of using an FDD template is that it lays all 23 of these items out in detail. An FDD prepared using such a template is designed to meet federal and state franchising laws.
Another of the benefits of using an FDD template is that it gives the appropriate framework for writing each item and customizing it for a particular business. In addition, legal terms are defined and clarified so that one can understand each step of the process.
It is obvious that using an FDD template while writing up an FDD is superior to writing the document from scratch. However, there is another option: hiring franchise specialists and attorneys to do the work. This costs a fortune. Franchise consultants and attorneys charge exorbitant fees for drafting these documents, refining them, and reviewing them. One of the benefits of using an FDD template is that it helps to minimize some of these expenses.
The Benefits of Using a Database of Existing FDDs
By now, you are familiar with the advantages to be gained by using an FDD template: You may, however, feel that there is a disadvantage to solely relying on it: it gives you no indication of the types of FDDs produced by other franchisors in your industry.
Fortunately, there is a solution to this problem: You can supplement your efforts by referring to existing FDDs. The benefits of using a database of existing FDDs in this way will be well worth the effort.
One of the benefits of using a database of existing FDDs is that it gives you access to documents used by successful franchise companies in your industry. Another of the benefits of using such a database is that seeing the details that govern other franchise companies’ successes will give you insight into the challenges that might come your way.
Yet another of the benefits of using a database of existing FDDs is that it saves you the time, effort and expense you would have expended trying to acquire such documents yourself. Others have taken the time to communicate with myriad franchise companies, request their documents, and add them to the database in PDF form. Furthermore, the documents reflect the most recent legal realities.
Click here to read our full review on different franchising templates & existing FDD databases available in the market
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