Are FDDs Public or Not?
The answer is kinda.
If you are like many people, you heard Franchise Disclosure Documents (FDDs) are “out there” and “available,” but when you search, all you find are sites offering to sell you the documents.
There are a couple of reasons for that. First, FDDs are not public records; they are not like court records, birth, death, and statistical records, or other types of documents you actually have a right to access. For some franchisors, in certain circumstances, you can find their FDDs online, but if you can’t, no one “has” to share it with you (assuming you are not actively engaged in their discovery process).
Whether you are a potential franchisor wanting to see what this whole “FDD” thing is about, a young franchisor trying to find competitive FDDs to see if you can adopt some best practices, or even a prospective franchisee wanting to find old FDDs of a franchisor that you are considering as an investment, knowing these parameters will quickly let you know if the documents are something you can find. I’ll even give you the direct links to find them at the end.
When Can You Find an FDD Online?
The Franchisor Must Be Registered in Wisconsin, California, or Minnesota
As previously mentioned, FDDs are not public records, and some states require franchisors to register their document with state authorities before they can offer or sell franchises in that state. Three such state authorities then make those documents available online: Wisconsin, California, and Minnesota.
You Must Know the Legal Name of the Franchisor, Not Just the DBA Name
This can be tricky, as the legal name may be different from the name used for their brand or business. However, in Wisconsin, the state allows searches for FDDs by both legal and DBA (Doing Business As) names, so if the franchisor you are looking for is offering franchises in America’s Dairyland, you may still be good to go.
The Franchisor Cannot Fall Under the Seasoned Franchisor Exemption
Different states provide different definitions of this. However, California is the only state that provides both online FDDs and has this exemption. If the franchisor has a net worth in excess of $5 million, you won’t find its FDD on California’s website.
Where Should You Look for an FDD?
There are other places to find an FDD, but your first stop should be these three state sites:
- California Department of Financial Protection and Innovation
- Wisconsin Department of Financial Institutions
- Minnesota Commerce Actions and Regulatory Documents Search
If you see something in an FDD that doesn’t make sense, want to learn best practices, or are looking to franchise your business, improve your franchise sales process, or even outsource it, don’t hesitate to reach out!
Since you are looking for FDDs, you are probably considering franchising. We should connect. As industry experts, Franchise Beacon prides itself on offering top-notch services to our clients, but also guidance to the franchise world at large. There’s nothing to lose but questions, and everything to gain by investing 30 minutes. Schedule a call today!