Franchise disclosure document: what to read first

FDD stands for Franchise Disclosure Document. The brand must give you these papers at least 14 calendar days before you sign the franchise agreement or pay for the franchise. The brand offering the franchise is known as the franchisor. That 14-day wait comes from the federal Franchise Rule, and it exists so you can go through the file before you're locked in.

Where you plan to open matters too. Some states have their own franchise registration or disclosure laws, and they can ask for more than the federal rule does.

Every FDD contains 23 required items. Each carries a set number and title, which means the same section sits in the same place in any brand's FDD. The sections listed here are the ones that speak to the money and risk questions buyers ask most.

Most people spot the upfront franchise fee (Item 5) first, since it's the opening payment. The continuing fees (Item 6) cover the royalty, meaning the cut of sales, or flat sum, you send the brand, typically weekly or monthly. Item 6 also covers charges for advertising, transfers and renewals.

Item 7, the cost to open, lays out the full estimate, beginning with the initial fee, training and real estate, then building in everything else needed to get the doors open. There's more detail in the Item 7 guide and the franchise fee versus royalty comparison.

Here is what that looks like for one brand. Crumbl's fees and opening cost for a cookie bakery come from Crumbl's 2026 FDD, on file with the Minnesota registry.

That $50,000 fee is a small slice of a total that can reach $1,472,533. It's the reason the cost to open deserves a look before the fee does.

Item 19 appears in every FDD, though sharing sales or earnings figures there is voluntary, and most franchisors do it anyway. Keep in mind these numbers are usually sales rather than profit, so they don't reveal what an owner actually takes home.

It's worth checking which outlets produced the numbers. Crumbl's 2026 FDD shows average yearly sales of $1,139,162, drawn from 776 franchised bakeries open for all of 2025 that filed complete figures. The Item 19 guide digs deeper.

This section (Item 20) shows how the brand has grown and how many owners have left over the last three years. Reading across those years shows whether outlet counts are climbing or shrinking.

You'll also see names and contact details for current owners and for owners who exited during the last year. There's no telling how many would be willing to talk with you. Crumbl's 2026 FDD lists 1,101 franchised outlets at the close of 2025. The Item 20 guide explains each table.

Item 12 states whether your franchise covers a set location. An exclusive territory means an area where the franchisor agrees to restrict certain competition.

Without one, the FDD will note that you could face competition from the franchisor's own locations. And even with one, an exclusive territory can still leave some competition open, so read closely what the franchisor is still allowed to do nearby.

Item 15 tells you whether you must run the business yourself instead of bringing in a manager.

Item 10 lays out any financing the franchisor offers. If the brand offers none, our guides on franchise financing and SBA loans cover other ways buyers pay, the SBA being the U.S. Small Business Administration, which backs bank loans.

Item 21 contains the franchisor's financial statements. These reveal the health of the company you'd sign with, rather than any single outlet.

Each brand figure on this site is pulled from the brand's newest FDD in the Minnesota Department of Commerce registry, taken from the fee, investment, performance and outlet items (5, 6, 7, 19 and 20). It's easy to set two or three brands side by side on the cost comparison page, or browse the full table.