Miami, FL commercial litigation attorney Robert Zarco talks about franchise disclosure documents (FDD) and why it’s so important to get experienced legal advice early in the negotiation process. He shares that the firm handles all aspects of franchising and franchise relationships. For a prospective franchisee considering the purchase of a franchise, it is essential to retain an experienced attorney familiar with the rules and laws governing franchising.

He notes that the Federal Trade Commission requires franchisors to provide each franchisee with a Franchise Disclosure Document (FDD). This document, which contains approximately 23 disclosure items, informs the franchisee about the business, leadership, bankruptcy history, required investments, supply sources, vendors, and other critical details.

Among the exhibits within the FDD, the franchise agreement is of paramount importance. Serving as an attachment to the FDD, the franchise agreement governs the relationship between the franchisor and franchisee. He emphasizes that every prospective franchisee and their legal counsel must carefully review every word of the FDD, particularly the franchise agreement. Failing to do so can be reckless and may result in significant challenges or regrets for the franchisee.