How to read an FDD
A Franchise Disclosure Document (FDD) is the disclosure a franchisor must give prospective franchisees before selling a franchise in the United States. It has 23 numbered items, in the same order for every brand — which is exactly what makes brands comparable, if you read the same items in each one.
The items that decide most purchases
Item 5 — Initial fees
The one-time fees you pay the franchisor up front, starting with the initial franchise fee. Compare the headline fee, and check for territory, training, or grand-opening fees stacked beside it.
Item 6 — Other fees
The recurring meter: royalty and advertising/brand-fund percentages, plus the long tail of technology, renewal, transfer and audit fees. A low Item 5 with a high Item 6 is a common pattern — read them together.
Item 7 — Estimated initial investment
The franchisor's low–high range for everything it takes to open, including the Item 5 fees. It is an estimate from the franchisor's experience, not a guarantee — your lease, market and buildout can land outside it.
Item 19 — Financial performance representations
Optional. If present, this is the only place a franchisor may make earnings claims, and the basis must be stated. Item 19 figures are not Item 7 costs, and neither item promises what you will earn.
Item 20 — Outlets and franchisee information
How many outlets opened, closed, were transferred or were sold back, by year. A brand can grow its total while churning heavily underneath — the tables let you see both.
Why the year-over-year diff matters
A single FDD is a snapshot. Fees that creep 1% a year, an Item 7 low end that drops while the high end holds, litigation that appears in Item 3 — those only show up when you line filings up side by side. That diff is what our multi-year redline audits automate, with every figure cited to its filing.
Frequently asked questions
Is Item 7 what I will actually spend?
No. Item 7 is the franchisor's estimated range for opening. It is a starting point for diligence, not a quote or a guarantee.
Does every FDD have earnings numbers?
No. Item 19 is optional; many franchisors include no financial performance representations at all.
Where do your figures come from?
From each brand's own FDD as filed with state regulators. Every figure on this site names its filing and issuance date, and is labeled: as filed — verify.