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What is an FDD?
Required by law, the Franchise Disclosure Document, or FDD (known until recently as the UFOC, or Uniform Franchise Offering Circular) informs qualified prospective franchisees of their rights and obligations before they sign your franchise agreement (see below) and buy a franchise from you. The law requires you to provide qualified prospective franchisees with a FDD at least 10 days before they sign a franchise agreement.
What is a Franchise Agreement?
When you and your new franchisees "sign on the dotted line," this is the legally binding contract you'll put your pen to. It describes all your rights and obligations, as well as those of your franchisee. Your franchise agreement sets the terms for every aspect of your relationship with your franchise buyers, including costs, royalties and fees, taxes, patents and copyrights, territory boundaries, operational stipulations, and much more—all of it varying according to your business and the way you want to run your franchise.