Renewing FDDs: What Franchisors Should Consider

For many franchisors with a December 31st fiscal year, now is the time to start preparing to renew their franchise documentation. The FTC rules require that the franchise disclosure document (FDD) must be updated within 120 days of the expiration of a franchisor's fiscal year. Registration states, such as New York, have an identical requirement. As a franchisor prepares to do so, that process presents an opportunity to review and improve franchise documentation, particularly the franchise agreement.

Over the past year, developments in the law and in business, particularly the technology associated with doing business, require franchisors to consider significantly revising and enhancing their franchise agreements. Some of the more interesting concepts that should be considered include:

Obviously, the above is just the tip of the proverbial iceberg. Any franchisor reviewing their franchise agreement with knowledgeable franchise counsel will find areas that require refinement, removal, or enhancement. The end result is a modernized agreement that keeps up with the reality of managing a franchise system in a constantly evolving marketplace.

Terrence M. Dunn is a founding partner at the New York-based law firm Einbinder & Dunn. He can be reached at 212-391-9500.

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