The franchise offering circular is required by law to be sent to your franchise applicants because it discloses everything they need to know before buying a franchise in your business.

The franchise offering circular is one of two or three franchise documents that make up the foundation of any great franchise relationship you will build.  When a potential franchise owner begins to poke around and sends up signals that he or she might be ready to buy into your business, the most important thing that can happen is to bring them up to speed with who you are, how they should get jump through the right hoops of buying a franchise and what life will be like when they are a full fledged member of your franchising community.

The franchise offering circular has gone through a lot of evolution in the last few years.  It is a standardized format because it is a document that you are required to send to a new franchise owner within the last few weeks before the deal is done. It is also a document that can get quite bulky because there are 23 different areas of disclosure that you have to cover when organizing a franchise offering circular to send it out to your future partners in money making.

That evolution has been so dramatic that the name of the franchise offering circular has gone through change as well. These days it is most commonly referred to as the franchise disclosure document or FDD for short.  The name change is worth tucking away in your memory banks because when the FTC begins to ask questions about your FDD so they can give you the nod to keep your franchise momentum going, it is good to know what they are talking about.

The name change from franchise offering circular to franchise discloser document puts the emphasis on an important word – disclosure.

For once, the government pencil pushers came up with a pretty good name change for the franchise offering circular.  For one thing, this disclosure document is far from a circular.  When we think of a circular, we think of that 5 page advertisement that you get from the grocery store that lists the specials of the week each Wednesday.  The franchise offering circular, or the FDD as we call it in these modern times will commonly get to a very impressive size.  Some complicated versions of the franchise offering circular have gotten as big as 500 pages long.

If you think putting together the franchise offering circular is a chore for you, think about the future franchise owner getting that encyclopedia of franchising in the mail.  As a disclosure document, they are expected to be aware of everything you are disclosing to them in the franchise offering circular. When they sit down to sign that franchise agreement and make this new partnership a formal affair, there is no saying they were not informed. So you make sure you pour your heart out in that franchise offering circular so if there are any questions or disputes once the franchise is open and money is being made, you can always point to that disclosure document and say, “Hey it is all right there in black and white for anyone to see.”