Franchise Disclosure Document
Legal document provided to prospective franchisees before they sign an agreement.
Detailed Explanation
A Franchise Disclosure Document (FDD) is a legal document that a franchisor must provide to a prospective franchisee before they sign a franchise agreement. It contains essential information about the franchisor, the franchise system, fees, initial investment, litigation history, and financial performance representations. It is required by law in many jurisdictions (like the US) to ensure transparency.