Why the FDD Doesn’t Tell the Whole Story

The Franchise Disclosure Document (FDD) is meant to protect buyers. It’s long. It’s legally required. It looks official.

But here’s the truth: The FDD is a starting point, not the full story.

What the FDD Does Provide:
✔ A look at franchisor leadership and legal history
✔ A breakdown of fees and required purchases
✔ Unit counts, openings, and closures
✔ (Sometimes) financial performance data in Item 19

But Here’s What It Doesn’t Show:
❌ Whether franchisees are actually making money
❌ The level of real-world support you’ll receive
❌ Whether the system is evolving or stagnating
❌ Hidden operating costs that crush margins

What Strong Franchises Do Differently:
✅ Include a detailed, audited Item 19 with realistic earnings data
✅ Encourage tough questions (not scripted sales processes)
✅ Are transparent about franchisee profitability, not just revenue
✅ Show a healthy mix of new and experienced franchisees growing in the system

Final thought:
Smart buyers use the FDD to guide deeper questions — not as a checklist to rush through. If it feels vague or incomplete, don’t ignore your gut. Dig deeper.

Need help decoding what’s in (and missing from) an FDD? [Let’s talk.]