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A Franchise Disclosure Document (FDD) is not a static document. As your franchise system evolves, your disclosure obligations evolve as well. Changes to your business operations, litigation history, leadership, fees, or franchise program may require updates to your FDD. This means unilateral FDD changes in Georgia are not just allowed; they are required in many situations.
Although federal law regulates the preparation and updating of FDDs, Georgia does not have a franchise relationship statute that limits a franchisor’s ability to revise disclosure documents. Our dedicated FDD attorneys can answer your questions about updating these documents.
There are several reasons why your organization might need to unilaterally make FDD changes in Georgia. Some examples include the following:
As your business grows, you may introduce new products, services, technology platforms, training programs, or operational requirements. Your FDD should accurately describe the franchise system you are offering to prospective franchise owners.
A franchisor may revise initial franchise fees, royalty structures, advertising contributions, technology fees, or other financial obligations for future franchise sales.
Federal law requires franchisors to disclose certain material information. This includes changes involving litigation, bankruptcy, executive leadership, supplier relationships, or other significant business developments.
The Federal Trade Commission regulates franchise disclosures through the Franchise Rule, 16 Code of Federal Regulations Part 436. Rather than governing the day-to-day relationship between franchisors and franchise owners, the Rule focuses on requiring accurate information before a franchise sale occurs.
Franchisors must keep the FDD accurate, which in practice means an annual update within 120 days after the close of the fiscal year, plus an amendment when a material change occurs during the year. This means when something involving the business changes in Georgia, it may be necessary to make unilateral FDD changes.
The FTC does not prohibit franchisors from updating their FDDs. Instead, it requires that disclosure documents remain accurate and current so that any prospective purchasers can make informed business decisions. A revised FDD applies to future franchise offerings, but updating a disclosure document does not automatically change the terms of an existing franchise agreement.
Unlike some states, Georgia has not enacted a comprehensive franchise relationship statute. Instead, the state generally leaves those issues to the parties’ contractual agreements.
As a result, whether a franchisor may implement operational changes during the life of an existing franchise relationship often depends on the language of the franchise agreement rather than a franchise relationship statute.
Many franchise agreements reserve the franchisor’s authority to update operating manuals, brand standards, technology requirements, and other system-wide policies. Those contractual provisions frequently determine the extent to which operational changes may be implemented after the agreement is signed.
By contrast, revisions to the FDD in Georgia primarily affect future franchise sales. Existing contractual rights and obligations generally remain governed by the executed franchise agreement unless the parties agree to modify those terms or the agreement itself authorizes certain changes. For that reason, franchisors should ensure their franchise agreements clearly define their authority to implement system-wide operational updates as needed.
An FDD update is more than an administrative task. Every revision should be reviewed to ensure it complies with federal disclosure requirements while remaining consistent with your franchise agreements and business practices.
At Franchise.Law, our attorneys focus their practice on the federal and multi-state regulations involving franchises across the country. We are based in North Carolina, are licensed in North Carolina and Florida, and are not licensed in Georgia, but our team is able to provide you with guidance and support when it comes to unilateral FDD changes in Georgia.