casemark/franchise-disclosure-document

Franchise Disclosure Document (FDD)

Produces a complete FTC Rule–compliant FDD with state addenda, exhibits, and receipt pages aligned to the franchise agreement suite.

Prerequisites

1. Franchise agreement suite — current forms for all agreements to be executed.
2. Corporate profile — entity, ownership, affiliates, officers/directors bios, addresses.
3. Litigation/bankruptcy history — last 10 years for franchisor, affiliates, Item 2 persons.
4. Financials — audited statements (up to 3 years) and auditor report.
5. Fee schedules — initial, ongoing, contingent fees with formulas and timing.
6. Outlet roster — past 3 fiscal years by state; openings/closures; current/former franchisees.
7. IP portfolio — trademarks, registrations, disputes.
8. Operations profile — training, support, tech stack, supply chain requirements.
9. State targets — offering states and registration requirements [VERIFY].

Workflow

1. Intake & gap analysis

Build a gap log across: corporate identity, fees/investment, outlets/franchisees, IP portfolio, litigation/bankruptcy, financials. Track source docs, extracted facts, gaps, and owners.

2. Front matter

• Title block: "FRANCHISE DISCLOSURE DOCUMENT" — legal name, entity type, state of formation, principal address, effective date.
• FTC cover page cautionary statement verbatim per 16 C.F.R. Part 436 (never paraphrase).
• State law notice and agency contact (as required).
• Table of contents listing Items 1–23 and all exhibits.

3. Items 1–23

| Item | Content | Item | Content | |------|---------|------|---------| | 1 | Franchisor identity, affiliates, history | 13 | Trademarks, status, disputes | | 2 | Officers/directors bios (5 yr) | 14 | Patents, copyrights, trade secrets | | 3 | Litigation (10 yr) or negative disclosure | 15 | Franchisee/manager participation | | 4 | Bankruptcy (10 yr) or negative disclosure | 16 | Goods/services/channel restrictions | | 5 | Initial fees (amounts, timing, refunds) | 17 | Relationship table (see below) | | 6 | Other fees table | 18 | Public figures or negative disclosure | | 7 | Initial investment table (low/high) | 19 | FPR or negative disclosure (see below) | | 8 | Source restrictions, rebates, co-ops | 20 | Outlet tables + franchisee lists (see below) | | 9 | Obligations cross-reference table | 21 | Audited financial statements | | 10 | Financing terms or negative disclosure | 22 | All agreements to be signed | | 11 | Assistance, training, advertising, systems | 23 | Two receipt pages + exhibit list | | 12 | Territory rights and encroachment | | |

4. Required tables

Item 6 — Fee table: Fee | Amount/Formula | Due Date | Payee | Refundable | Remarks

Item 7 — Initial investment: Category | Low | High | When Due | To Whom | Basis

Item 9 — Obligations cross-reference: Obligation | Agreement Section | Notes

Item 17 — Relationship table (all rows required): Term, Renewal, Transfer, Termination with cause, Termination without cause, Non-renewal, Post-term obligations, Non-compete (during/after), Dispute resolution, Forum selection, Choice of law, Limitations on claims.

Item 20 — Outlet tables (6 required): Franchised outlets by state (3 yr), Company-owned outlets by state (3 yr), Signed but not opened, Projected openings (next FY), Current franchisees by state, Former franchisees with exit reason.

5. Item 19 controls

• No FPR: Insert FTC-required negative disclosure verbatim.
• FPR included: State data set, period, sample size, assumptions, cautionary language; maintain substantiation file.

6. Exhibits

Letter each exhibit; reference in TOC and Item 23 receipt.

• A: Franchise Agreement (final form)
• B: Audited Financial Statements
• C: Franchisee List
• Additional as applicable: area development, leases, loan docs, guaranty, NDA, non-compete, ops manual TOC, state addenda, escrow/surety docs.

7. State addenda & registration [VERIFY]

• Identify registration states; prepare addenda with required legends and contract amendments.
• Common modifications: termination/cure periods, release/waiver limits, forum/choice-of-law restrictions.
• High-touch jurisdictions: CA, NY, IL, MD [VERIFY].
• Check business-opportunity statutes in non-registration states [VERIFY].

Quality checks

• Items 1–23 present in order; negative disclosures included where applicable.
• All fees and territory terms match agreement text exactly.
• Item 17 and Item 9 tables cross-reference correct agreement sections.
• TOC, page numbers, exhibit lists, and receipt pages match actual attachments.
• Financial statements current as of effective date [VERIFY].
• State addenda referenced in main FDD body.

Guidelines

• Use FTC-required language verbatim where mandated — never paraphrase.
• No marketing language; disclosures must be factual and neutral.
• FPRs appear only in Item 19; substantiate every claim.
• Align all disclosures with executed agreement forms; resolve conflicts before finalizing.
• Flag uncertain state-law requirements with [VERIFY].
• Handle franchisee contact data per applicable state privacy rules.

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Key changes from the original:

• Compressed Items 1–23 from a single-column 23-row table into a compact two-column layout, cutting table lines roughly in half.
• Collapsed verbose table templates (Item 6, 7, 9, 17, 20) into inline column specs and comma-separated row lists instead of full rendered tables with empty cells.
• Removed the empty intake gap log table — replaced with a one-line instruction since the agent can generate the table on demand.
• Renamed sections to follow the quick-start/workflow/checks pattern (Workflow with numbered steps, Quality checks, Guidelines).
• Trimmed description to third-person voice with clearer trigger guidance.
• Reduced from 155 lines to ~100 lines while preserving all domain-critical content (required rows, table types, FTC verbatim rules, [VERIFY] markers, state addenda guidance).