Practices can vary greatly from franchisor to franchisor when it comes to updating a Franchise Disclosure Document (FDD) at the end of a fiscal year.   Smaller systems with only a few franchisees and rapidly growing or changing franchise systems sometimes miss the less standard updates hidden within the voluminous FDD.   With that in mind I’ve put together a short list of some of the more overlooked updates smaller system may need to make to an FDD:

1. Training Instructors.  Franchisors usually remember to update the officers and executives disclosed under Item 2 (Business Experience) but frequently miss updating disclosures regarding training instructors in Item 11 (Franchisor’s Assistance, Advertising, Computer Systems and Training).  Whether you are listing the actual names of the trainers or just his or her title(s) the disclosures must be current. Remember that even if your trainers haven’t changed his or her years of experience will grow.
2. Initial Investment Estimates.  In comprising the initial investment estimate chart under Item 7, a small and emerging growth franchise systems may initially use a small group of company-owned outlets clustered in one geographic area to calculate its numbers.  Once a franchisor has more representative data available, the initial estimated investment should be updated.
3. Operations Manual Table of Contents.  The Operations Manual is probably revised quite a bit more than your franchise agreement and the Exhibit listing the Table of Contents with page numbers should be updated annually to reflect these changes.
4. Financial Performance Representations.  If your FDD does not provide financial performance representations under Item 19 then the annual update season is the time to really think about whether you want to start.  FPRs are a great way to provide information prospects want to know and may reduce the likelihood that a franchisor’s sellers will make unauthorized earnings claims.

The above are just a few of the FDD areas that warrant careful scrutiny but it is always important to carefully review the whole FDD during updating and renewal time.