Our Commitment
Every Clause
Reviewed.
Every Risk
Named.
Since 2014
The FDD is a 200-page document designed by the franchisor's attorney. You deserve one on your side.
400+
FDDs Reviewed
38
States Filed
$2.4B
Deal Value Advised
What we look for
"Item 12 territory restrictions. Item 17 termination rights. Item 19 financial performance. These three sections alone determine whether your deal is sound."
— Marcus T., Managing Partner
Counsel Review
No. 12
Case Study
Single-Unit Acquisition · Quick Service Restaurant
The Clause That Would Have
Cost Her the Lease.
Renata Kowalski had spent fourteen months selecting her franchise. She had toured three locations, attended Discovery Day, and spoken with twelve existing franchisees. When the 214-page FDD arrived, she read it twice. She still missed Item 12, Section 4, Paragraph (c): a radius restriction that made her chosen site commercially unviable within eighteen months of a planned highway expansion.
Counsel's review identified the protected territory language as non-standard — the franchisor had quietly amended the radius from 1.5 miles to 0.5 miles in the most recent FDD version, a change not flagged in the Item 21 amendment disclosure. Cross-referencing the municipal zoning filings confirmed the exposure.
"We renegotiated the territory to 2.0 miles and added a right-of-first-refusal on two adjacent zip codes. The deal closed six weeks later."
The amended franchise agreement protected Renata's investment and gave her a clear path to a second unit. The territory renegotiation alone was conservatively valued at $340,000 in protected revenue over the initial ten-year term.
FDD Exhibit — Item 12 Territory
Original vs. Negotiated Language · Identifiers Redacted
| Provision | Original FDD | Negotiated |
|---|---|---|
| Protected Radius | 0.5 miles | 2.0 miles |
| Term Length | 10 years | 10 years |
| Adjacent ZIP Rights | None | Right of First Refusal |
| Renewal Territory | Franchisor discretion | Same terms guaranteed |
| Transfer Restrictions | 90-day notice | 30-day notice |
| Encroachment Remedy | None specified | Liquidated damages clause |
* All identifying information redacted per client confidentiality agreement. Terms reflect executed franchise agreement, not FDD boilerplate. Item 12 amendment logged with state examiner per FTC Franchise Rule §436.5(e).
Original Item 12 Language (Excerpt)
"Franchisee shall operate the Franchised Business only at the Approved Location. Franchisor grants Franchisee a protected territory of radius from the Approved Location. reserves the right to modify protected territory boundaries upon days written notice in connection with system-wide ."
↑ "Modify … upon notice" — no minimum territory guaranteed on renewal. This is the clause that needed to change.
Free Resource
The 47-Point FDD
Review Checklist
What our attorneys check in every FDD before a client signs. Items 1 through 23, ranked by risk severity, with the six clauses most commonly used to limit franchisee rights.
Item 12 — Territory radius language and modification rights
Item 17 — Termination triggers and cure periods
Item 19 — Financial performance representation scope
Item 8 — Required purchases and supplier restrictions
Item 6 — Fee escalation and audit rights
+ 42 more items in the full checklist
Download the Checklist
No spam. One email with the PDF. That's it.
Case Study
Multi-Unit Resale · Fitness Franchise · 4 Locations
Negotiating Renewal Terms
at 2 a.m. Isn't Strategy.
Devon Okafor had operated four Planet Fitness-model locations for nine years when the renewal window opened. The franchisor's standard renewal agreement included a "system modernization" clause requiring $180,000 in remodel costs per location — a requirement not mentioned in his original franchise agreement and introduced as a system-wide "update" in the 2022 FDD amendment buried in Exhibit H.
Counsel's review identified three independent grounds for challenging the remodel requirement: (1) the original Item 7 estimated investment did not include the modernization cost, creating an FTC disclosure deficiency; (2) the amendment was issued outside the 120-day re-disclosure window; and (3) two comparable franchisees in adjacent markets had received renovation deferrals through quiet negotiation.
"The franchisor agreed to phase the remodel over 36 months, cap costs at $60,000 per location, and grant a 5-year renewal rather than the standard 3. Devon saved $480,000 in immediate capital requirements."
The negotiated renewal also removed the franchisor's unilateral right to relocate Devon's units within the market — a provision that had been quietly inserted in the 2021 FDD and which three other franchisees in the system had already triggered.
Renewal Agreement — Term Comparison
Multi-Unit Operator · 4 Locations · Fitness Sector
| Term | Franchisor Offer | Negotiated |
|---|---|---|
| Renewal Period | 3 years | 5 years |
| Remodel Cost / Unit | $180,000 | $60,000 (capped) |
| Remodel Timeline | Prior to renewal | 36-month phase |
| Royalty Rate | 6.5% | 6.0% (Yr 1–2) |
| Unit Relocation Right | Franchisor discretion | Removed |
| Transfer Fee | $25,000 | $15,000 |
| Right to Sub-franchise | Not permitted | Not permitted |
$480K
Capital Deferred
5 Yrs
Renewal Secured
4 Units
Protected
* Negotiated terms executed under confidential settlement. FTC disclosure deficiency not pursued; resolved through contractual negotiation. Multi-unit agreement governs all four locations collectively.
Case Study
Franchise System Launch · 14-State Registration · Emerging Franchisor
Item 19 Doesn't Have to Be
Your Most Dangerous Page.
Priya Mehta had built a profitable home services concept across six company-owned locations in Texas before deciding to franchise. Her existing attorney had drafted an FDD. When Counsel reviewed it, Item 19 — the financial performance representation — contained four statements that would not survive California DFPI scrutiny and two that created affirmative misrepresentation exposure under FTC Rule 436.
The representations cited "average gross revenue" without disclosing the number of franchisees included in the calculation, the time period covered, or the geographic distribution of the sample — all required disclosures under the FTC's 2007 Amended Franchise Rule. More critically, the highest-performing location was included without a footnote identifying it as an outlier.
"We rebuilt Item 19 from the underlying P&L data. The restructured representation was more conservative — and became the most persuasive section of the FDD because it was bulletproof. Priya closed 11 franchise sales in the first six months."
The system launched in 14 registration states simultaneously. California's DFPI issued a comment letter with 11 items; all were resolved within 21 days. The FDD has been renewed twice without a single state examiner objection.
Regulatory Filing Timeline
14-State FDD Registration · Home Services Franchise · 2024
Pre-Filing
Week 1–3
Item 19 Audit
Financial performance representations reviewed for accuracy, completeness, and FTC §436.5(n) compliance. Three representations removed; two restructured with qualifying language.
Drafting
Week 4–8
FDD Assembly
All 23 Items drafted. Franchise agreement, operations manual index, and five state-specific addenda completed. Supplier disclosure schedule reconciled.
State Filing
Week 9–12
Registration States (14)
Simultaneous filing in CA, MD, IL, MN, NY, ND, SD, WA, HI, IN, MI, OR, RI, WI. Examiner comments received from CA and MD within 30 days.
Examiner Response
Week 14
California Comment Letter
DFPI issued 11-item comment letter. All items resolved within 21 days. Key issue: Item 19 "average gross sales" representation required franchisee-count disclosure.
Clearance
Week 16
Effective Registration
Registration effective in all 14 states. First franchise sale closed 11 days after final clearance. Item 19 as restructured became a competitive selling advantage.
Ongoing
Year 2
Annual Renewal
FDD updated with audited financials, new franchisee disclosures, and litigation item. Renewal filed 120 days before expiration in all registration states.
16 Wks
Registration to Sale
14 States
Simultaneous Filing
0
Litigation Items
* Timeline reflects actual engagement from initial FDD review to first franchise sale. State registration effectiveness dates vary. Client identity withheld per engagement agreement.
Confidential Review
Upload Your FDD.
We'll Find What
You're Missing.
Every FDD review begins with a confidential intake. We read the agreement against the three case studies above — territory language, renewal terms, and financial representations — and deliver a written summary of findings within five business days.
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Your documents are protected from the moment you submit. We do not share, index, or store FDDs beyond the engagement.
5 Business Day Written Summary
Not a phone call to schedule a phone call. A written findings memo identifying every clause that warrants attention.
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We are admitted in every major franchise registration state and practice exclusively in franchise disclosure law.
Confidential FDD Review
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