Is Your Franchise Prepared For FDD Renewal?
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Renew Your FDD Easily with Roda Chalfant Franchise Law
We get it: You're a business owner, not a lawyer. And FDD renewal can be a total pain.
However, failure to update your FDD before it expires can cause your business to "go dark" for franchise sales in all 50 states.
Luckily, we can help you keep the lights on. We at Roda Chalfant have had a front-row seat to the growth and development of franchise systems from infancy to maturity and bring real-world legal and operational knowledge to all aspects of a franchise system’s lifecycle — including FDD renewal.
You'll work directly with one of our experienced franchise attorneys to create your FDD and franchise agreements.
Annual FDD renewal is also the perfect time for us to help you:
Make any changes to your franchise documents.
Remove outdated information that no longer reflects how you operate your franchise system.
Prep for presenting the strong financial performance data that you and your franchisees have been working so hard on this year.
Our franchise legal support is offered on the go, which means you can simply pay for what you need, when you need it
Don't let the lights go out on your franchise — Renew today!
Here are the 7 Most Asked Franchise Disclosure Document Renewal Questions
You probably have a lot of questions about FDD renewal like: What happens if I skip a year? What if I don't think anything needs to be updated? Isn't it easier if I renew my FDD with the franchise creation company I used in the first place?
The short answer is: It all depends on how long you'd like to keep your franchise open. Although franchise disclosure document renewal may seem like something you can put off or ignore altogether, we don't recommend it for a number of reasons — the least of which is inconvenience. Read on to learn why it's important to renew your franchise disclosure document with a knowledgeable franchise attorney.
1. Do I have to update my FDD every year?
Yes! Under the federal Franchise Rule that applies in all 50 states, your Franchise Disclosure Document (FDD) will expire on the date that is 120 days from the end of your fiscal year. For most franchisors, that's April 30th. And no, your state registrations are NOT the same as your annual FDD update.
2. I’m happy with my FDD, why does it have to be updated?
Many FDD updates have to do with the passage of time. One of the most important updates is your franchisor financial statements. In connection with your FDD update, you also have to provide updated financial statements for your franchising company. The types of financial statements can vary based on how long you have been franchising and in what states you want to register your FDD. Trust us — it's in your best interest your FDD remains fresh, accurate, and legally compliant.
3. What happens if I don’t update my FDD?
If you don’t update your FDD before it expires you will "go dark" for franchise sales in all 50 states. Selling a franchise under an FDD that is not up to date:
Is a violation of the federal Franchise Rule and may also be a violation of state franchise and business opportunity laws.
Can act as a "get out of jail free" card for your franchisees and can add litigation risks down the road.
Can severely impact the purchase price of your franchise system if you go to sell and the buyer uncovers violations of state and federal franchise laws.
4. Can I make other changes to my FDD or Franchise Agreements during the update?
Of course — we recommend it. Your annual update is an opportunity as much as it is an obligation. Think of your annual update as "spring cleaning" for your franchise system and documents
5. What about my state registrations?
State franchise registration laws are not the same as the federal Franchise Rule. You must comply with both to legally offer franchises. Some state laws match up with the federal Franchise Rule. Other states have shorter deadlines, and still others have one-year registration periods from the date the registration is made effective. Unfortunately, the federal Franchise Rule trumps state law.
FDDs completed by franchise creators, marketing systems, or franchise development agencies all have one thing in common: They are based on very simplistic, outdated FDD templates and are often riddled with errors and major deficiencies, creating serious risks for the brand and its owners — a reflection of your brand at large that could affect your potential franchise sales.
If you didn’t work directly with an experienced franchise attorney to create your FDD and Franchise Agreements, we HIGHLY recommend you have our team do a complimentary review of your FDD to identify deficiencies and areas of risk.
6. I used a franchise creation company to make my FDD – why can't I just renew with them?
7. Why should I work with Roda Chalfant Franchise Law?
At Roda Chalfant Franchise Law, we’re more than just franchise attorneys – we’ve actually done it all before. Prior to starting our boutique franchise law firm, we developed, owned, and scaled dozens of brands from their first FDD and franchise sale to multi-million-dollar exits.
Our entire business model depends on the success of our franchisor clients and their ability to grow with confidence. We pride ourselves on being franchise development professionals who happen to have law degrees – not the other way around.
If you’d like to learn more about our flat fee FDD renewal programs, including our annual franchisor legal support programs, contact us ASAP and renew with confidence.
