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Documents & legalFranchise Disclosure Document (FDD)
A mandatory disclosure document in many markets, giving investors information on the system, costs, obligations, litigation and financials before signing.
Where this sits
The document set is where every promise becomes binding. Reading it carefully before signing is an investor's single most important protection.
In practice
This section summarises United States federal regulation (16 CFR Part 436) as published by the Federal Trade Commission. Rules change and differ by country — check the source before acting. For reference only; not legal advice.
In the United States the disclosure document is not a courtesy — it is a legal obligation with a clock attached. Under 16 CFR 436.2(a), a franchisor must furnish its current disclosure document at least 14 calendar days before the prospective franchisee signs a binding agreement or makes any payment. Its contents are prescribed item by item in 16 CFR 436.5, which runs from Item 1 to Item 23.
Elsewhere the rules differ and must be checked locally — Vietnam, for example, regulates franchising through its Commercial Law and Decree 35/2006, with its own registration and disclosure requirements. Treat "FDD" as the US instrument it is, and ask what the equivalent obligation is in the market you are actually buying into.
Source: 16 CFR § 436.2(a) — Obligation to furnish documents · 16 CFR § 436.5 — Contents · Reviewed: 2026-09-02