If you’re starting a franchise or investing in one, you need to understand the Franchise Disclosure Document (FDD). This critical document defines your rights, risks, and responsibilities. Both franchisors and franchisees benefit from experienced legal guidance from a Livonia, Michigan franchise attorney when drafting or reviewing it.
What Is a Franchise Disclosure Document?
Federal law requires every franchisor to provide an FDD to potential franchisees. You must do this at least 14 days before signing a contract or collecting any money. The FDD helps buyers make informed decisions about the opportunity.
This document includes 23 distinct items that outline the franchise’s full business model and legal obligations:
- The franchisor’s history and management background
- Past or pending litigation and bankruptcy
- Initial and ongoing fees
- Territory rules and exclusivity
- Advertising and marketing responsibilities
- Training and operational support
- Financial performance representations (optional)
- Franchise agreement and other binding contracts
Each section must be clear, complete, and compliant with FTC rules and applicable Michigan law.
Why Franchisors Need a Franchise Attorney
Drafting a compliant and effective FDD demands legal precision. An experienced attorney helps franchisors stay in line with federal regulations. Mistakes or vague terms can lead to disputes or federal action.
Legal counsel can also:
- Draft a compliant FDD that accurately reflects your operations
- Identify legal risks and strengthen weak disclosures
- Update the FDD annually, as the FTC requires
- Reflect material changes clearly and timely
- Craft franchise agreements that protect your brand and hold up in court
By involving an attorney early, you reduce legal exposure and protect your long-term growth strategy.
Why Franchisees Should Always Consult Counsel Before Signing
Franchisees face serious financial and legal obligations. The FDD can be overwhelming and dense. Legal review ensures you fully understand the deal.
A franchise attorney will:
- Interpret complex clauses and highlight high-risk terms
- Break down ongoing fees, royalties, and hidden costs
- Clarify territory rights, renewal terms, and transfer limits
- Explain dispute resolution, indemnification, and personal guarantees
- Negotiate improvements in areas like support, territory, or fees
Without legal help, you risk signing a one-sided agreement that limits your future options.
Why Hire a Livonia-Based Franchise Attorney?
Michigan doesn’t require FDD registration, but state law still requires the filing of a Notice of Intent, among other requirements. Further, Michigan state law also affects contract enforceability and the terminability of franchise agreements. A Livonia franchise and trademark attorney will provide long-term support beyond simple FDD review.
A Livonia, Michigan franchise attorney can help with:
- Entity formation and state compliance
- Lease negotiation and commercial real estate issues
- Trademark registration, renewal, and enforcement
- Ongoing legal support as your business grows
You gain a partner who will journey with you through your franchise venture with the legal acumen you need to find success.
Final Thoughts
The Franchise Disclosure Document is more than just a formality. It defines the franchise relationship from day one. A single oversight can lead to costly litigation.
Franchisors and franchisees alike benefit from experienced legal review. You protect your brand, reduce risk, and set up for success.
Looking to launch or invest in a franchise in Livonia or Southeast Michigan? Contact our office today by calling us at 1 (734) 224-7167 or clicking the button below to schedule an initial consultation.