The franchise disclosure document (FDD) is designed to provide basic areas of information which are generally important to making an investment decision by a prospective franchisee. The FTC Franchise Rule requires that the FDD be periodically updated, after it is issued, to include any material changes to its disclosures. But, what if a material change has taken place after the FDD has been delivered to a prospect? The franchisor is not required to make any additional disclosures to the prospect after it has provided its FDD to the prospective franchisee unless he or she asks for it. Once an updated FDD has been asked for, the prospect must be disclosed all material changes to the FDD. Unfortunately, many prospects do not make any request for updates. So, remember to ask for any FDD updates before making the final investment decision.
Stephen M. Feidelman maintains a general civil law practice in Hollywood, Florida serving Miami-Dade, Broward and Palm Beach counties with a core concentration on franchise and dealership representation and allied business law issues. He has attained a Martindale-Hubbell Peer Review rating of AV®, Preeminent™ – 5.0 out of 5, which depicts that a lawyer is recognized for the highest levels of skill and integrity; has served on the Executive Council of The Florida Bar Business Law Section; chaired The Florida Bar’s Antitrust, Franchise and Trade Regulation Law Committee; been a faculty participant in numerous seminars related to franchise and business opportunity legal issues; contributed to Florida Bar committee consumer education pamphlets and seminar course materials; and been a guest college lecturer on franchise law issues. He is also a Florida Supreme Court Certified Circuit Civil Mediator and a Qualified Arbitrator.