Conduct a free FDD Search Online and Download almost any franchise disclosure document
Fee things in life are free, so when you see a few dozen websites offering to sell you a copy of a franchisors FDD, you may think that its difficult or impossible to obtain a free FDD.
Its not! You just have to know where to look. A typical google search does not generally result in a direct link to the document.
The disclosure of a franchise disclosure document, or FDD, is the only way a franchisor can legally offer and sell franchises in the United States. Certain states require franchisors to register before selling in their state. In turn, the FDD becomes public record.
There are two ways to obtain a free FDD.
First, you can utilize publicly available online databases. Second, if that fails, you can simply ask the franchisor for a copy.
The purpose of this blog is to provide a brief overview of how to find an FDD and explain why you are entitled to one if you cannot locate on your own. Finding a free FDD is vital as a franchisor and as a prospective franchisee.
Competitor FDD’s help franchisors and prospects review the competitive landscape, compare pricing, and in some cases compare outlet performance.
If you want to franchise your business or purchase a franchise, please partnering with our law firm.
We offer free consultations and offer reasonable fixed rates for franchisors and franchisees.
The Best Source for a free FDD Search
There is no federal database for finding a free franchise disclosure document. However, the North American Securities Administrators Association (“NASAA”) maintains an electronic filing depository.
This depository is optional and all states do not participate, however, it provides a centralized process for franchisors and their attorneys to file initial and ongoing franchise registration materials. In turn, this data is available online for you to easily conduct a free FDD search.
This database is the best source for finding a free FDD because it is a single source with multiple states participating. Meaning, if the franchisor does business in one of the participating states, then you are likely to find a copy of the FDD on the NASAA electronic filing depository.
The following states currently fully participate in the depository:
- Illinois
- Maryland
- Nebraska
- New York
- North Dakota
- Rhode Island
- South Dakota
- Virginia
- Hawaii
- Michigan
- Minnesota
- Washington
- Wisconsin
The NASAA FDD search database allows you to easily view online or download a copy of the franchisors FDD. You simply click on the franchisor, find an active filing, and download the FDD registered in the state you selected.
Please note, there may be minor variances between the various versions of the FDD in the registration states, but they are typically uniform for purposes of a preliminary review or competitive analysis. If you are purchasing a franchise, the franchisor will always need to disclose the FDD on file in your particular state.
No luck? search individual state databases
The following states maintain their own database for franchisors to file franchise disclosure documents. Some are migrating to NASAA, so these may not be available forever.
Wisconsin Free FDD Search
The Wisconsin state franchise database is our second favorite place to look. Why?
- It is incredibly easy to use
- A free FDD is viewable online as soon as the franchisor files the document
Some states have a delay or do not post until they have approved the offering. It is also easier to file in Wisconsin than many states, so franchisors are often more willing to offer franchises in this state.
The system allows you to search by the legal name or the DBA / trade name. State databases that require a legal name can be more tricky, unless you know the legal name of the franchisor entity – which is not always similar to the actual brand name.
Conducting a free FDD search is easy in Wisconsin. One additional unique feature of the Wisconsin site is that you can also view a list of all franchisors currently selling in the state.
Minnesota Free FDD Search
The Minnesota Commerce Department also accepts online franchise registration and posts approved filings in their “CARDS” system. You just have to select “Franchise Registrations” in the drop down search menu options. If a franchisor is registered in Minnesota, you will find their FDD here.
We do not typically search this database first, but we use it a lot to help clients evaluate franchise opportunities.
Unlike most states, the Minnesota CARDS system allows you to search for prior years. This allows you to pull a free FDD from recent years. How does that help?
Pulling a free copy of an old FDD allows you to see changes in the system. For example:
- Have the fees went up?
- Are the territories smaller?
- Was there litigation in the past that is no longer disclosed?
Pulling an old copy of a free FDD can be valuable during your diligence process. This is one of the tools we use to help franchisees negotiate.
California Free FDD Search
California has a massive economy, and this means many franchisors want to offer franchises in their state. As a result, the database is often a good source for disclosure documents. The only downside is that you need the companies legal name to perform a search. Also, many larger franchisors will file under an exemption and their document is not always available online.
Indiana Free FDD Search
Last on our list is Indiana. Nothing against the state, but the FDD search is slow and at times the database is not as user friendly as the NASAA database or other state databases. Nonetheless, Indiana does serve as a public database for locating a free FDD. They are also relatively easy in terms of franchise filing states, making it an attractive franchise registration state for franchisors.
Ask the Franchisor Directly
If you cannot find a free FDD using one of the public databases outlined in this blog, then you can always ask the franchisor directly. They will always have the latest and greatest version of their document. The only potential issue is that they cannot provide this document to you if you reside in a franchise registration state. You can click here for a full list of franchise registration laws on a state by state basis to see if you are in a registration state.
If you take this route, you will of course have to talk to a sales rep. We suspect this is why you are searching for a free FDD online. However, it may be your last option if you do not want to pay for the FDD using a third party provider.
You will be asked to sign a “Receipt” page. Some prospects get nervous by this request. However, it is required under federal and state franchise laws.
Your signature on the “Receipt” page is only to document that you received this FDD and that is why it is entitled as a Receipt.
Signing this document is not an offer, or an acceptance, and does not form any contract whatsoever.
This may require a call or two, but the franchisor should disclose their FDD for free. Here’s why:
It is an unfair or deceptive act or practice in violation of Section 5 of the Federal Trade Commission Act for any franchise seller covered by part 436 to fail to furnish a copy of the franchisor’s disclosure document to a prospective franchisee earlier in the sales process than required under § 436.2 of this part, upon reasonable request.
Meet the Author
Derek A. Colvin
Derek is a graduate of Penn State Law and Old Dominion University. He started his legal career in 2009 as a prosecuting attorney before entering private practice.
Derek currently serves business clients as a partner at Waldrop & Colvin, the law department for your business. His practice focuses on SMB client legal services and franchise law.
Derek is laser-focused on delivering efficient and effective solutions for business legal needs. As a seasoned litigator and experienced business attorney set on thinking critically and communicating effectively, Derek is well-suited to advise and protect your business.
Derek often serves as outside general counsel providing transactional support for business owners. He represents SMB independent owners, as well as franchisors, and franchisees as a franchise attorney.
Primary Practice Areas: Franchising | Franchise Law (Franchisor Legal Support & Franchisee Legal Support), SMB Mergers & Acquisitions, Entity Formation and Governance, Lease Negotiations, Trademark Registration, Dispute Resolution and Civil Litigation & Outside General Counsel Support
