Make Your Mechanical Changes to Your FDD

While you are waiting for your business people to gather the information that you have requested, you can move forward with making some of the changes to your FDD. The first items I change are the effective date throughout the FDD, the footer (which I use to designate the brand, date and version of the FDD and whether it is the paper or electronic version) and the state effective dates, which I delete alltogether. For the information that I am waiting on from the business people, I add an @ symbol in the body of the FDD where the information goes. In this manner, I know that my FDD is not completely updated until a computer search of the document reveals no @ symbols. This makes it almost impossible to miss an item that requires updating.


Next I review the Item 2 bios to remove all items that are more than 5 years old, review Item 3 for closed litigation that is more than 10 years old and also review Item 4 for any bankruptcies that are no longer disclosable. In Item 21, I udpate the description of the financial statements and delete any unaudited financial statements that were previously included.


Finally, I delete all the exhibits that I know will be replaced and mark the location with the @ symbol, such as the list of current and list of former franchisees and the audited financial statements.


Next week, we will comple our due diligence and follow-up on requested information that has not yet been received. This is when the real tooth pulling begins!