When you show interest in a franchise opportunity, the Franchise Company is required by federal law to provide you with their Franchise Disclosure Document (FDD) 

I’ve read through over a hundred of these documents.  Most are hard to understand, at best.  Usually, they are down right confusing and require a highly trained, and highly paid lawyer to tell you what exactly you may be entering into if you buy a franchise.

The practice of requiring this disclosure document was designed to protectperspective franchise buyers from scams, un-proven business models, and fly-by-night franchisors. 

The problem now is that when you sign off stating that you have received and understand this document…and then you sign a franchise agreement…you are almost always signing away may of your rights.  For Example:  Many franchise companies offer Discover Days.  This is when they bring you to their headquarters and tell you how great their concept is and how much money you can make.  They verbally tell you all kinds of stuff.  If you look closely at the FDD that they are providing you, generally you will see that in that document the franchisor disclaims all oral representations made to you. 

Usually, when you sign a franchise agreement, you are required to acknowledge that no verbal representations were made to you…and if there were any made, that you ignored them and made your decision to buy a franchise solely on the information in the Franchise Disclosure Document.  Do you see the problem here?

I mention all this so that you will be careful.  Truly don’t rely on anything that you are verbally told.  If it turns out to not be true, you will probably not have a leg to stand on in court because of all the disclaimers in the FDD and franchise agreement. 

You Should Also Check Out This Post:

More Active Posts: