Part 2 cover the Franchise Disclosure Document, why they exist and how to use them as a tool to make a smart decision on which franchise is right for you.

1. Presented by:
Marvin L. Storm

2. Review: Types
• Extreme Entrepreneurs
• Innovator Entrepreneurs
• Founder Entrepreneurs
• FranPrenuer

3. Review: What is
• Licensing Concept vs. Buying

4. Review: Benefits
• Brand
• Valuation at exit
• Learning curve reduced
• Technology
• Marketing
• Support
• Systems are a significant
competitive advantage

5. A Brief History
of Franchising
Two Type of Franchise Business Models?
- Trademark Franchising
- Business Format Franchising
- History of Franchise Regulations
 The McDonald’s Story
 Fraud & Abuse in Franchising
 UFOC in 1972-1978
 FDD adopted in July 2009

6. Franchise Disclosure Document
Discussion
______
Understanding the
Document, Its History and
How to Use It

7. Franchise Disclosure
Documents
Our Discussion on the Franchise
Disclosure Documents Will Be
Done in Four Discussion:
________
1.Overview of the Disclosure Docs
2.A Brief History of Franchising
3.The Disclosure Section
4.The Franchise Agreement

8. Franchise Disclosure
Documents
• What is the Franchise
Disclosure Document?
Three Parts to the FDD
1) The Franchise Disclosure
2) The Franchise Agreement
3) The Exhibits
Guarantees, General Release, Confidentiality
Agreement, Consent To Transfer, Financial
Statements, State Addenda To the Disclosure
Document, Operations Manual - Table Of Contents

9. Franchise Disclosure
Documents
• What is the Franchise Disclosure
Document?
• Why is the FDD required?

10. Franchise Disclosure
Documents
• What is the Franchise Disclosure
Document?
• Why is the FDD required?
• Three Things to Understand
about the FDD?

11. Franchise Disclosure
Documents
Three Things to Understand
about the FDD?
1) The intent of the FDD is to provide
any and all information that the
Federal Trade Commission and
your State Regulators believe you
need to know to make an informed
business decision.

12. Franchise Disclosure
Documents
Three Things to Understand
about the FDD?
2) Use it to gain an understanding of
the creditability of the franchisor
management team, the financial
terms for start up, ongoing fees and
how the franchisor protects the
brand.

13. Franchise Disclosure
Documents
Three Things to Understand
about the FDD?
3) Gain an understanding of the
contractual obligations of both
parties and how the franchise
system works.

14. Review: Key Understandings
About the FDD
• Intent
• Team, financial terms, fees and brand
protection
• Obligations and how the system works

15. Questions???