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The primary franchising documents needed to create a franchise relationship and franchise your business include: Franchise disclosure document. Franchise agreement. Operations manual. Franchise Registration Applications and Notices. Financial Statements.
At the heart of this framework lies the Franchise Disclosure Document (FDD), which provides prospective franchisees with essential information about the franchisor and the franchise opportunity to make informed decisions.
A Franchise Disclosure Document includes 23 specific pieces of information (called items), the franchisors franchise agreement, and various exhibits (like a list of current and past franchisees, and audit financials of the franchisor.
You need sufficient starting capital to purchase or lease space for your business, acquire equipment and starting inventory, obtain necessary business licenses and insurance, and hire and train staff. Start your business with a built in support structure. Franchisors would like to see their franchisees to succeed.
North Dakota is a franchise registration state. Before you offer or sell a franchise in North Dakota, you must register your Franchise Disclosure Document (FDD) with the North Dakota Securities Department.
South Dakota is a franchise registration state. So, you must file your FDD with the Division of Insurance and Securities Regulation of the South Dakota Department of Labor and Regulation prior to offering or selling franchises in the state.
The Franchise Rule requires franchisors to make material disclosures in five categories: (1) the nature of the franchisor and the franchise system; (2) the franchisor's financial viability; (3) the costs involved in purchasing and operating a franchised outlet;