{"ok":true,"canonical_url":"https://dealroom.so/glossary/franchise-disclosure-document","api_url":"https://dealroom.so/api/public/glossary/franchise-disclosure-document","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"franchise-disclosure-document","term":"Franchise Disclosure Document","aka":"FDD","group":"People and paperwork","definition":"A legal document that franchisors must provide to prospective franchisees, outlining detailed information about the franchise system, its history, costs, and obligations. It's essential due diligence for any franchise buyer.","what_it_means":"If you're buying a franchise, the FDD is your primary source of information. Review it thoroughly to understand fees, training, support, and any restrictions. The SBA requires the FDD and a copy of the Franchise Agreement to approve loans for franchises. Ensure the franchise is listed on the SBA Franchise Directory.","url":"https://dealroom.so/glossary/franchise-disclosure-document","official_sources":[{"slug":"sop-50-10","title":"SOP 50 10 — Lender and Development Company Loan Programs","official_url":"https://www.sba.gov/document/sop-50-10-lender-development-company-loan-programs","official_label":"View on SBA.gov","authority_tier":2,"publisher":"U.S. Small Business Administration","source_guide_url":"https://dealroom.so/sba-7a/sources/sop-50-10"},{"slug":"13-cfr-part-120","title":"13 CFR Part 120 — Business Loans","official_url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120","official_label":"View on eCFR","authority_tier":1,"publisher":"Office of the Federal Register","source_guide_url":"https://dealroom.so/sba-7a/sources/13-cfr-part-120"}],"related":[{"slug":"franchise","term":"Franchise","url":"https://dealroom.so/glossary/franchise"},{"slug":"franchise-agreement","term":"Franchise agreement","url":"https://dealroom.so/glossary/franchise-agreement"},{"slug":"franchise-directory","term":"Franchise Directory","url":"https://dealroom.so/glossary/franchise-directory"},{"slug":"due-diligence","term":"Due diligence","url":"https://dealroom.so/glossary/due-diligence"}],"related_questions":[{"question":"If a seller note on full standby is repaid prematurely, what are the lender's disclosure obligations to the SBA?","url":"https://dealroom.so/for-lenders/questions/if-a-seller-note-on-full-standby-is-repaid-prematurely-what-are-the-lender-s-disclosure-ob"},{"question":"What is an SBA *loan authorization* document, and why is it important?","url":"https://dealroom.so/sba-loans/basics/what-is-an-sba-loan-authorization-document-and-why-is-it-important"},{"question":"What is the specific SBA policy document that addresses collateral life insurance requirements?","url":"https://dealroom.so/sba-7a/questions/what-is-the-specific-sba-policy-document-that-addresses-collateral-life-insurance-requirem"},{"question":"What information is required to document the purchase price allocation for a business acquisition?","url":"https://dealroom.so/sba-7a/questions/what-information-is-required-to-document-the-purchase-price-allocation-for-a-business-acqu"},{"question":"How does a lender document adherence to prudent lending standards in the underwriting credit memo?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-document-adherence-to-prudent-lending-standards-in-the-underwriting-cred"},{"question":"How does the buyer's responsiveness to document requests affect the SBA 7(a) application timeline?","url":"https://dealroom.so/sba-7a/questions/how-does-the-buyer-s-responsiveness-to-document-requests-affect-the-sba-7-a-application-ti"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Franchise Disclosure Document","url":"https://dealroom.so/glossary/franchise-disclosure-document","source_type":"DealRoom Data"}}