It’s that time again, when most franchisors start to think about updating their Franchise Disclosure Document (FDD) for next year. Around the time this article gets published in early December, if you are a franchisor client of ours, you should be receiving your first “FDD Renewal Reminder” email. By Tom Spadea
It’s that time again, when most franchisors start to think about updating their Franchise Disclosure Document (FDD) for next year. Around the time this article gets published in early December, if you are a franchisor client of ours, you should be receiving your first “FDD Renewal Reminder” email. Like taxes, physicals, going to the dentist, and the myriad of other annual rituals of modern society, updating your FDD is something you know you need to do but often feel overwhelmed by the process each year.
My advice is to talk to your team and appoint someone to be the FDD Hero this year. Your FDD Hero is the one person in your organization who takes it upon themself to gather, chase, annoy, and poke the many people that need to serve up information before the FDD can be completed. It shouldn’t be the owner/president/CEO; it needs to be someone who is very organized and a great nudge. We all have that one person in our office who is not afraid to bug people, who will not miss deadlines, and who hates to leave tasks incomplete. It’s not a skill set, it’s a personality trait that you need. Incidentally, most entrepreneurs, myself included, do not possess this personality trait. The creative, comfortable with risk, spinning plate master is not the person you want leading this project.
The role of the FDD Hero is not to make decisions on the information in the FDD, but to know who needs to decide what, can work off a checklist, and can chase down people for information. Every week, every day, even every hour matters, especially if you are registered in multiple states and want to avoid going dark. Every year franchising expands, but the state regulators do not. They have more and more FDDs to approve with the same, and sometimes fewer, resources. In most states, it is a first-come, first-serve system and the time stamp when your FDD is received by the state regulators’ office is the biggest determining factor as to when your FDD will be approved.
Talk to your franchise attorney this week and make a game plan. Talk to your CPA about a target for your audited financials TODAY! Connect your CPA, your franchise attorney and your FDD Hero and get them to commit to a process, deadlines and transparency. Make this the year that you are ahead of the game. If you are reading this in December, you can make it happen. If you need help, call me, 215-525-1165.
– Tom Spadea