Disclosing The FDD in ZORS
The Franchise Disclosure Document (FDD) is a legally required document that franchisors must provide to prospective franchisees before any agreements are signed or payments are made. It contains detailed information about the franchise, including its financials, legal history, fees, and obligations, helping potential franchisees make informed decisions.
ZORS integrates document management and e-signature functionality directly into the territory mapping software and CRM platform. Disclosing the FDD has never been easier.
How to Disclose the FDD to Prospects in Zors
ZORS makes franchise disclosure easy with data visualization and embedded signature captures
Franchisors can visualize franchise approval status on a state-by-state basis, with green, yellow, and red color coding to easily alert franchisors when they are approved, when a renewal deadline is approaching, or when they are not authorized to offer franchises.
Franchisors can upload their FDD in .docx or .pdf format directly into ZORS.
Franchisors can create a template, so they only need a name and email address to disclose a prospect.
Franchisors can use the template to disclose any prospect in seconds.
Franchisors can track disclosure on a per contact basis and the fully signed disclosure is automatically saved to the contact
Data Visualization
The ZORS franchise territory mapping software allows sales and compliance teams to quickly visualize franchise approval on a state-by-state basis.
Document Upload
The first step is to upload the FDD into the ZORS territory mapping software. You can access the Esign dashboard by clicking the “Esign” tab on the left hand side of the CRM. Next, simply click on “Create Template” and drag and drop your FDD in either .docx or .pdf format. Once the file is uploaded, simply click “Edit Template” and add the name, signature and date fields to your FDD.
Sending the FDD to Prospects
Ready to disclose a prospect? Once you create and name your template, it is incredibly easy to disclose new prospects. You have two options in ZORS:
Esign Dashboard. You can utilize your template directly from the Esign Dashboard in the ZORS CRM. Simply click “New Submission”, select your template, and assign a signor - then click “Send for Signature”. ZORS will instantly disclose your prospective franchisee.
State Approval Map. While on the franchise approval map layer, you can click on a state, select a template, select a signor, and click send.
Document Management
One of the best parts of using ZORS to disclose prospects is that it is easy to manage the disclosure and contract workflow. Each document you send out for e-signature can be assigned to a contact, company, or territory.
Using ZORS To Manage and Sign All Contracts
Users can utilize the ZORS territory mapping software to manage and send contracts of all kinds of contracts. Common examples include:
Confidentiality and Non-Disclosure Agreements
Franchise Agreements
Amendments and Addendums
Customer and Vendor Contracts
Have Questions about Franchise Compliance?
All franchisors need to understand the key aspects of the FDD Process
Disclosure Timing
Under Federal Trade Commission (FTC) Rule 436, franchisors must provide the FDD at least 14 days before a franchisee signs an agreement or pays any fees.
Contents of the FDD
The FDD includes 23 items covering business history, financial statements, litigation history, initial and ongoing fees, franchisee obligations, territory restrictions, and more.
Updates and Amendments
Franchisors must update the FDD annually within 120 days after their fiscal year-end.
Material changes (such as lawsuits or major financial changes) may require immediate updates.
State-Specific Franchise Registration and Approval Rules
While the FTC regulates franchise disclosure at the federal level, some states have additional franchise laws, including registration, approval, and ongoing compliance requirements.
1. Franchise Registration States
Some states require franchisors to register their FDD with a state agency before offering franchises. These states typically review and approve the FDD before the franchisor can sell franchises.
2. Franchise Filing/Notice States (One-Time or Annual)
These states do not require full FDD registration, but franchisors must file a notice or submit basic information before offering franchises.
3. Non-Registration States
Other states follow only the FTC Franchise Rule and do not require separate state approval. Franchisors can sell franchises as long as they comply with the FTC’s 14-day disclosure rule.
4. Business Opportunity States
A few states are not registration or notice states, but they have business opportunity laws. These states typically provide an exemption for franchisors if they have a valid FDD and a federally registered trademark.
All franchisors should work with a franchise attorney to understand and manage the disclosure process. We grant free access to all franchise attorneys, so they can help manage your franchise approvals and document management.
