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The Federal Trade Commission (FTC) publishes copious information about Franchise Disclosure Documents, but reading hundreds of pages of opaque explanations will get you no closer to completing the disclosures you need to make for franchising your business. For professional legal assistance with the requirements of franchise disclosure documents (FDD) in Georgia, contact the attorneys at Franchise.Law.
We are based in Charlotte and hold law licenses under NC law, but we maintain a national multi-jurisdictional practice representing franchisors that need to comply with federal franchise laws and regulations. With our federal and multi-state focus, we help franchisors expand their operations throughout Georgia and into other states around the U.S.
The FTC requires FDDs in Georgia to include 23 separate items. A lawyer from Franchise.Law could verify that your FDD has all of those items and that the information and disclosures in them are complete and accurate.
Much or all of that information is exactly what a prospective purchaser of your business would ask for while conducting due diligence.
FDDs should address the company’s structure, legal standing, and operational framework, including:
We could review your FDD to ensure all of the information is accurate and up-to-date.
To ensure compliance and transparency, franchisors need to disclose financial and operational information, including:
A franchisor might also consider providing contact information for existing and former franchisees. You should confer with an experienced attorney for the strategy that will work best for your business.
The FTC and Georgia can each impose severe fines and penalties on franchisors who fail to comply with FDD requirements. Given the high costs of franchising a business model, a franchisor should make every effort to get an FDD right the first time.
For example, the FTC Franchise Rule under 16 Code of Federal Regulations §§ 436, 437 allows the FTC to impose a fine of $11,000 per violation per day until errors and omissions are remedied. In extreme situations, willful violations can foster criminal charges and incarceration of a franchisor’s principals. Even if the FDD passes muster, the franchisor must give each franchisee at least 14 days to review all documents and materials before accepting any funds from the franchisee or executing any agreements.
Georgia’s state business regulatory agencies can also impose fines in amounts of several thousand dollars for those violations. While some franchisors might consider these penalties to be draconian, they impose a level playing field and prevent less scrupulous parties from gaining an unfair advantage with exaggerated business claims or promises of guaranteed franchise profits.
The requirements of Franchise Disclosure Documents (FDD) in Georgia are anything but trivial. Your best strategy to comply with those requirements is to retain a legal team that has substantial proven FDD experience.
For more than 10 years, our attorneys have guided franchisors through FDD requirements. We have drafted bespoke franchise agreements and reviewed financial disclosures for businesses in a range of industry sectors. Our goal is always to understand your business first, then reflect all details about your business in the FDD. Please call us and schedule a conference to discuss how we could help you meet your FDD obligations.