Franchise Disclosure Document

FRANCHISE DISCLOSURE DOCUMENT

Summary A franchise disclosure document can be used as part of a franchise chain’s documents pack.

Is a Franchise Disclosure Document legally required? The franchise disclosure document is a legal requirement and is used to set out the basic franchise information that the prospective franchisee needs to know before deciding to buy the franchise. An organisation that wants to franchise its business operations and sell franchises to franchisees must use a Franchise Disclosure Document in their franchise process.

A Statutory Disclosure Document for franchises sets out various facts and information that a prospective franchisee needs when considering whether to buy into the franchise opportunity. This information includes the number of franchisees already in the franchise, pertinent financial information, and the details and experience of the Franchisor’s owners and management.

See also: our comprehensive Franchise Documents Pack

What does the Disclosure Form include? This template Disclosure Document for franchises consists of: consents and warranties; franchisor’s obligations and business experience; litigation and liquidation; payment to agents; existing franchisees; intellectual property; site or territory; supply of goods and services; costs and earning information; other relevant disclosures and statements.

How long is this Franchise Disclosure example? This template franchise form can be printed onto eighteen pages, but will be longer after the franchise chain’s unique information has been added in.

What do you need to do to complete the Disclosure Document?

• Read the sample Disclosure Document to confirm that it meets with your requirements. It is editable, so make changes as required.
• Fill in your details as the franchisor where indicated, and including the franchisee and financial details.
• Ask your prospective franchisee to sign to confirm their receipt of the document.
• Make sure your prospective franchisee signs a Franchise Agreement.
• A Franchise Application Form and NDA are also recommended.

As the franchise may be subject to the Consumer Protection Act and other legal requirements, a specialist’s advice should be sought.

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