an event put on by the franchisor, typically at the franchise’s headquarters, for potential franchisees to learn about the franchise and meet representatives of the franchisor
the process of the buyer investigating the franchise prior to completing the purchase; due diligence includes reviewing the FDD, having conversations with representatives of the franchisor, attending a Discovery Day, and speaking with current franchisees
the federal law, overseen by the Federal Trade Commission (FTC), that governs franchises in the U.S.; many states also have their own laws that apply to franchises
a business that is operated by a franchisee but is overseen and branded by the franchisor; as a franchisee, you are paying for the right to do business under the franchise’s brand name and according to its systems and methods
the contract between the franchisor and franchisee that sets out the rights and obligations of each
a document where the franchisor sets out important information about the franchise such as the duties of the franchisor and franchisee, fees, financial statements of the franchisor, and other details relating to the relationship between the franchisor and franchisee; the FDD is required by the Federal Franchise Rule and must be updated annually
a person (or company) that operates a franchised business
the company that sells and provides support for a franchise
the fee paid by the franchisee to the franchisor to buy a franchised business, typically due when the Franchise Agreement is signed
a deal financing method where a buyer uses their retirement funds to pay for business start-up and acquisition costs
a recurring fee due to the franchisor, typically based on a percentage of gross revenue of the franchised business
(typically refers to the SBA 7(a) program) a loan for the purchase of a franchised business that is backed by the U.S. Small Business Administration, thereby making it less risky for a lender to approve; SBA loans typically have lower underwriting requirements than conventional loans so are easier for a buyer to obtain, however, in exchange they contain more requirements for the buyer to meet to obtain the loan
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