Franchise Coaching Q&A – Five Tips to Help Aspiring Franchisees Tackle FDDs with Terry Powell, Founder of The Entrepreneur’s Source
Decoding the language and structure of Franchise Disclosure Documents (FDDs) is one of the most difficult challenges facing any aspiring franchise owner. Even if these franchise prospects pursuing an alternative career that allows them to take control of their life, do have experience with franchise terminology and legal documents, full-scale FDD reviews can still be difficult and intimidating. And regardless of any prospect’s comfort level, reviewing any FDD without the help and support of a franchise coach who has spent decades in the franchising space is downright dangerous as the chances of selecting the wrong franchise opportunity is infinitely more likely.</span></span></span></p>
In order to help franchise prospects take a more strategic approach to the FDD review process, we asked franchise thought leader, Terry Powell, to provide us with five quick tips to getting started. Few leaders in franchising are better equipped than Terry to share these insights as he is the man responsible for building The Entrepreneur’s Source, a leading national franchise coaching company that is devoted to helping franchise candidates find powerful alternative careers through franchising, from the ground up for more than 30 years.</span></span></span></p>
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Here are Terry’s tips to help prospective franchise candidates review FDDs more effectively:</span></span></span></p>
1. </strong>Work with a franchise coach to learn the difference between the actual FDD section and Exhibit of the Franchise Agreement</strong></span></span></span></p>
2. </strong>Remember, the only binding document if/when you become a franchisee is the franchise agreement, not the FDD in its entirety</strong></span></span></span></p>
3. </strong>Important focus areas in the FDD are items 1, 7, 12, 19 and 21 as they describe mission critical components of the franchise opportunity, including the brand’s history and leadership team, the initial investment and financial performance representation</strong></span></span></span></p>
4.The key to reviewing the Agreement is to ask yourself, “What are my rights and obligations if I enter into this agreement?” A franchise coach can help you answer that important question.</span></span></span></strong></p>
5. </strong>And understand that being asked to sign a receipt for an FDD does not bind you or obligate you to proceed with the investment</strong></span></span></span></p>
These are some great tips for all of our readers who are considering their first, or next, franchise opportunity. </span></span></span></p>
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