How A Properly Written FDD Helps Franchisors and Franchisees
Franchisors are rarely excited about doing an FDD, a franchise disclosure document, but of course, the law is that they have to be done. Every franchisor has to give a franchise disclosure document to a perspective franchisee at least 14 days before offering them a franchise or taking any money from them. A franchise disclosure document is not the most exciting thing for a franchisor to create, it's frankly not the most exciting thing for a franchisee to read, but it's important and if it's done properly it can do a couple of things for a franchisor.
Number one, it can keep them out of trouble with the government which is always a good thing. Number two, if it's drafted properly it can make sure that the franchisee knows exactly what's required and exactly what's required of the franchisor as well, so that the franchisor is protected against claims later on by the franchisee saying, "Hey, I didn't know I had to do that", or, "Hey, I thought you were going to do more for me." The point of doing a franchise disclosure document carefully and properly upfront and having it done by somebody with experience to do it right is to protect both parties moving forward. It's true that it's an expense, it's true that it's a little bit of a pain in the neck to do, but if you do it right, it can save a lot of grief down the road.
Gunderson, Denton & Peterson, P.C.
Mesa Location:
1930 N. Arboleda, Suite 201
Mesa, Arizona 85213
Office: 480-655-7440
Fax: 480-655-7099
Website: http://gundersondenton.com
Phoenix Location:
40 N. Central Avenue, Suite 1400-1532
Phoenix, AZ 85004
Office: 480-325-9937
Website: http://gundersondenton.com/phoenix
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