For most franchisors, December 31 marks the end of their fiscal year and the beginning of the countdown to the day when their Franchise Disclosure Documents will “go stale”. Under the FTC’s Franchise Rule, every franchisor must update their FDD no later than 120 days after their fiscal year end. On top of that, their state franchise registration will need to be updated soon (in most cases). Here are some things that every franchisor should think about as they get ready for their annual FDD update:
A recent study from the U.S. Census Bureau reports that franchises play a vital role in today’s challenging economy. Released in September 2010, the Economic Census Franchise Report was the first comprehensive report of its kind to be published by the government. The report states, “Franchise businesses accounted for 10.5 percent of businesses with paid employees in the 295 industries for which franchising data were collected in 2007. Of the 4.3 million total establishments surveyed, 453,326 were either franchisee or franchisor-owned businesses.” The new report provides the following insight on how franchising helps support the American economy.