Reference
The 23 FDD items, and what each one tells a vendor.
Every US franchisor files the same 23 items in the same order. That is what makes filings comparable across brands, and it is why four of them are worth more to a software vendor than any pitch deck. Below is what each item contains, and what it tells you if you are trying to sell into the system rather than buy into it.
Start here
Item 1: The Franchisor
The franchisor's legal identity, its corporate parents, predecessors and affiliates, and how long it has run this business.
For a vendor: Names the parent. A brand held by a private equity platform is rarely a single sale: the same owner usually holds a portfolio, and one approved vendor can travel across it.
Item 2: Business Experience
The officers and directors, with their titles and prior roles.
For a vendor: Your actual buying committee, disclosed by name. Whether the system has a CTO or CIO at all tells you if technology is owned at HQ or improvised by operators.
Item 3: Litigation
Pending and past litigation involving the franchisor and its management.
For a vendor: Franchisee lawsuits over required purchases or technology fees are a direct signal that mandating your product will meet resistance.
Item 4: Bankruptcy
Bankruptcies involving the franchisor, its predecessors, affiliates, officers and directors.
For a vendor: A credit check you get for free. A system that has been through bankruptcy buys differently and pays differently.
Item 5: Initial Fees
The one-time fee a franchisee pays to join, and anything else due before opening.
For a vendor: Sets the scale of what a new unit already spends at signup, and whether an onboarding fee for your product is a rounding error or a fight.
Item 6: Other Fees
Every recurring and occasional fee: royalty, advertising fund, transfer, renewal, audit, and the technology fee.
For a vendor: The single most useful item on this page for a vendor. If a technology fee is already disclosed here, the system has a budget line for software and a habit of collecting it. If not, you are creating one.
Item 7: Estimated Initial Investment
The low-to-high range to open one unit, itemised across build-out, equipment, inventory and working capital.
For a vendor: Unit economics before you quote. A system whose units open for 80,000 dollars and one that opens for 2 million are not the same buyer, whatever the unit count says.
Item 8: Restrictions on Sources of Products and Services
What franchisees must buy from the franchisor or an approved supplier, and how a supplier gets approved.
For a vendor: Your route to market. This item states whether the franchisor can compel purchases at all, and describes the approval process you would have to pass. A system with no procurement control means selling to every operator one at a time.
Item 9: Franchisee's Obligations
A cross-reference table pointing to every obligation the franchisee takes on.
For a vendor: The fastest index in the document. Use it to jump straight to the technology, reporting and supplier clauses instead of reading 200 pages.
Item 10: Financing
Any financing the franchisor or an affiliate offers, and its terms.
For a vendor: A franchisor that finances equipment may finance a software rollout, which changes who signs your contract.
Item 11: Franchisor's Assistance, Advertising, Computer Systems, and Training
What the franchisor provides, and critically, the computer systems and software a franchisee is required to use.
For a vendor: The incumbent list. Named systems here are what you displace, and the wording tells you whether use is mandated or merely recommended. A mandate means one sale at HQ; a recommendation means several hundred.
Item 12: Territory
Whether a franchisee gets an exclusive area, how it is defined, and what the franchisor may still do inside it.
For a vendor: Tells you how the map is carved, which sets whether a regional pilot is even possible or whether every operator overlaps.
Item 13: Trademarks
The marks the franchisee may use, and any challenges to them.
For a vendor: Mostly legal housekeeping. Relevant if your product surfaces the brand to consumers.
Item 14: Patents, Copyrights, and Proprietary Information
Patents and copyrights the franchisor holds, and the confidentiality it imposes.
For a vendor: Proprietary software built in-house shows up here. That is a build-versus-buy incumbent, and a harder one to displace than a licensed vendor.
Item 15: Obligation to Participate in the Actual Operation
Whether the owner must personally run the unit or may hire a manager.
For a vendor: Owner-operator systems buy differently from absentee-investor systems. The first reads every invoice, the second delegates to a manager you have to reach separately.
Item 16: Restrictions on What the Franchisee May Sell
Limits on the goods and services a franchisee may offer.
For a vendor: Constrains any product of yours that adds a revenue line, such as loyalty, delivery or upsell tooling.
Item 17: Renewal, Termination, Transfer, and Dispute Resolution
Contract length, renewal terms, how either side exits, and where disputes are heard.
For a vendor: The franchise term is the outer bound on a multi-year contract you sign with an operator.
Item 18: Public Figures
Any public figure used to promote the franchise, and what they are paid.
For a vendor: Rarely relevant to a software sale. Usually empty.
Item 19: Financial Performance Representations
Sales, income or cost figures the franchisor chooses to disclose. Disclosure is optional, which is why many filings omit it.
For a vendor: Whether franchisees can afford you. Average unit volume is the closest thing to a budget signal in the document, and its absence is itself a signal.
Item 20: Outlets and Franchisee Information
Unit counts by state and year, openings, closures, transfers and terminations, plus a list of current and former franchisees with contact details.
For a vendor: The buyer list, disclosed by federal requirement. Names and addresses of the operators, plus a three-year growth and closure record that shows whether the system is expanding or contracting before you build a territory plan.
Item 21: Financial Statements
Three years of audited financial statements for the franchisor.
For a vendor: Whether HQ can fund a system-wide rollout itself or has to push the cost to franchisees, which decides who you are really selling to.
Item 22: Contracts
Copies of every agreement the franchisee will sign.
For a vendor: The franchise agreement contains the technology clauses in their binding form. Item 11 summarises, Item 22 governs.
Item 23: Receipts
The two detachable receipt pages proving the prospect received the document.
For a vendor: Administrative. No commercial signal.
See it in a real filing
Every item above is extracted from live filings.
These are not definitions written from a template. Each brand page carries the figures pulled from that brand's own FDD: the fees from Items 5 and 6, the investment range from Item 7, the required systems from Item 11, the unit counts from Item 20.
Common questions
What is in Item 11 of an FDD?
Item 11 covers the franchisor's assistance, advertising, computer systems and training. For a software vendor it is the most useful item in the document: it names the systems a franchisee is required to use, and the wording shows whether that use is mandated by the franchisor or merely recommended.
What is in Item 20 of an FDD?
Item 20 gives outlet counts by state and year, openings, closures, transfers and terminations, plus a list of current and former franchisees with contact details. It is the only place a franchise system is federally required to publish its operator list and its three-year growth and closure record.
What is in Item 19 of an FDD?
Item 19 holds financial performance representations: sales, income or cost figures the franchisor chooses to disclose. Disclosure is optional under the FTC Franchise Rule, so many filings omit it entirely, and the omission is itself a signal.
How many items are in a Franchise Disclosure Document?
Twenty-three, fixed by the FTC Franchise Rule. Every US franchisor files the same 23 items in the same order, which is what makes filings comparable across brands at all.
Which FDD items matter most if I sell software to franchises?
Item 11 names the incumbent systems and says whether they are mandated. Item 20 gives you the operator list and the growth record. Item 6 shows whether a technology fee already exists, meaning the system has a budget line for software. Item 8 describes whether the franchisor can compel purchases at all, which decides whether you sell once at HQ or several hundred times.
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