Time to Establish Your FDD Update Plan

Now that the holidays are behind us for another year, it’s time to hit the ground running for updating your FDD, if you have a December 31 fiscal year end. This is the time to establish your plan and timeline for updating the FDD, leaving plenty of time to prepare your state filings. I generally plan each step in the process, but the general categories to consider include circulating the FDD for comment, sending the Background/Litigation/Bankruptcy Questionnaires to the Item 2 people, sending the Salesperson Disclosure Form to your franchise salespeople, requesting specific information for the FDD (such as revenues from restricted purchases, financial performance representation data, Item 20 charts and lists, etc.), incorporating all comments and circulating a redlined FDD for final comments, incorporating new audited financial statements and obtaining the auditor’s consent, and creating the final clean and redline of the FDD for filing with the states. In the coming weeks, I will identify the more specific action items that must be addressed. If you would like an Excel spreadsheet that identifies each action item, send me an email request. Until next week, happy updating!