Creating your Franchise Disclosure Document (FDD) is one of the most important milestones in transforming your business into a franchise system. It’s more than a legal requirement — it’s a trust document that can either accelerate your franchise growth or quietly stall it.
When people search for “FDD creation” or “Item 19 financial performance representations,” they’re often asking two essential questions:
-
What needs to be included?
-
How do I ensure it helps franchise sales instead of hurting them?
The answer lies in balancing compliance with transparency. Your FDD must protect your brand, but it should also support your story and help build confidence with future franchise owners.
Listen to Your Attorney — But Don’t Stop Thinking!
Your franchise attorney’s role is to keep you compliant, but that doesn’t mean their advice should go unquestioned. Most franchise attorneys have never sold a franchise themselves. Their mindset is rooted in risk avoidance, not in what drives conversions or builds emotional trust with potential franchisees.
If your attorney’s recommendations don’t align with your instincts or your goals, ask questions! There’s nothing wrong with getting a second opinion from another attorney or from a franchise sales organization that lives in the trenches every day. Your FDD should be legally sound and commercially viable, but not scare everyone away!
Consultants Are Not Salespeople
The same advice applies to consultants. Many franchise consultants have deep operational or strategic experience but haven’t personally held sales conversations with nervous prospects. Even if someone once held the title of CEO or President of a franchise brand, that doesn’t mean they were the ones sitting across from buyers who were scared, skeptical, or uncertain about investing.
Titles and past positions can sound impressive, but what matters most is real-world franchise sales experience — knowing how to communicate value, handle objections, and build trust. Don’t assume every consultant understands the psychology of a first-time buyer. Validate their experience before relying on their advice.
Tell the Truth in Item 19 — Even If It’s Not Pretty
If you remember one thing from this article, let it be this: honesty in your Item 19 protects you.
We have a long-standing joke at FranLift that says:
“What do you call a CEO who gives truthful sales numbers to a prospect, but those numbers aren’t in their Item 19?”
Answer: A felon
If your financial numbers are accurate, include them. If they aren’t great, that’s fine — you can explain them. What you can’t do is discuss any numbers that aren’t disclosed in your FDD. Once you leave them out, they become off-limits in every sales conversation, good or bad.
Including verified numbers not only protects you legally — it builds credibility. When a franchisor hides financial data, it signals fear or uncertainty. When they share it, it signals confidence and transparency.
Transparency Builds Trust — and Trust Drives Sales
Having Item 19 numbers, even if modest, shows you run an honest and accountable operation. Prospective franchise owners appreciate clarity more than hype. If you can show EBITDA numbers for several years from your corporate location, even better. That kind of transparency demonstrates maturity and gives buyers something to believe in.
The more complete your financial disclosure, the stronger your position in the sales process. Transparency is a differentiator.
Align Legal, Consulting, and Sales Perspectives
Your FDD shouldn’t just satisfy your attorney — it should also empower your development team. Legal, consulting, and sales perspectives must be aligned. The document must protect the brand, inform the buyer, and help your team tell the brand story with confidence.
When those three perspectives work together, the result is an FDD that’s compliant, credible, and compelling.
Compliance and Conviction Go Hand in Hand
Franchising is built on relationships and integrity. The Franchise Disclosure Document is often the first impression your brand makes on a potential franchisee. It’s a reflection of your honesty, professionalism, and long-term vision.
When built thoughtfully, your FDD doesn’t just protect you — it helps you grow. It becomes the foundation of your reputation as a brand that’s confident enough to share the truth.
Final Thoughts
Creating your FDD and preparing your Item 19 are not box-checking exercises — they’re strategic decisions that shape your brand’s future.
Remember:
-
Transparency is your strongest sales tool.
-
If advice doesn’t feel right, question it.
-
Include your real numbers — even if they’re not perfect.
Your FDD tells the story of your business to every prospective owner. Done well, it builds the trust that fuels growth.
Your Brand. Lifted.
