What is the name of the document that franchisors in the US must provide to potential franchisees?

The document U.S. franchisors must provide to potential franchisees is the Franchise Disclosure Document, or FDD. It is the standardized pre-sale disclosure document required under the Federal Trade Commission’s Franchise Rule.

An FDD is designed to let a prospective franchisee investigate the opportunity before signing a franchise agreement or paying money. It contains 23 required categories of information, including the franchisor’s history, litigation and bankruptcy records, fees, estimated investment, restrictions, obligations, financial statements and current and former franchisees.

The FTC generally requires the FDD to be delivered at least 14 calendar days before the prospect signs a contract or pays the franchisor or an affiliate. That waiting period gives the buyer time to review the disclosures and seek legal or financial advice.

“Uniform Franchise Offering Circular,” or UFOC, is a common mix-up. It was the older term used under earlier disclosure guidelines; the modern federal terminology is Franchise Disclosure Document. The FDD is also distinct from the franchise agreement, which is the binding contract.