What's Your Next?

Franchise Disclosure Document Item 15 Full Review

May 20, 2023 Stacey Riska
What's Your Next?
Franchise Disclosure Document Item 15 Full Review
Show Notes


Many people who acquire a franchise want to know if they can be kicked out of that franchise.  If you are one of them you are going to want to read Item 15 of the Franchise Disclosure Document (FDD) closely.

Item 15 has to do with your obligations in the participation of the franchise itself. In this particular item, there are multiple pieces as far as what the requirements are for you and what you should be doing as a franchisee. 

Ownership Type

There are three types of business ownership and that really ties into this particular item. The question is are you going to be an owner-operator, semi-absentee, or a passive income-based business? Sometimes candidates will come to us and they're leaning more towards the second two, semi-absentee or passive and they believe they're just going to get this business and they're not going to have to be involved in it. Well, Item 15 is going to very much delineate what, if any, ongoing day-to-day involvement you as the franchisee has to keep that business going.

So basically the structure and do you have to be involved in the day-to-day or can you be semi-absentee or passive? That's really what Item 15 is laying out here. 

Training and Support

The second section is more around training and support. To caveat it’s not just the training and support of the owner of the franchise itself, but could also spell out any training that would be needed if that owner decides to hire a manager to run the operations…

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