Net lease glossary
FDD (Franchise Disclosure Document)
A disclosure document franchisors must give prospective franchisees under the FTC Franchise Rule, covering fees, financials, litigation, and unit data in 23 items.
The Franchise Disclosure Document is required by the Federal Trade Commission's Franchise Rule and must be provided to prospective franchisees before they sign or pay. It contains 23 standardized items, including fees, litigation history, estimated initial investment, financial performance representations in Item 19, outlet data in Item 20, and audited franchisor financial statements in Item 21. Net lease investors use FDDs, often available through state registration databases, to evaluate the brand behind a franchisee tenant.