How I Franchised This The Franchise Lawyer’s Playbook: How to Spot Red Flags in an FDD Before You Sign
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Dec 18, 2025 In this engaging discussion, Adam Wasch, founding partner of The Franchise Firm, sheds light on the essential elements of a Franchise Disclosure Document (FDD). He shares valuable insights on common buyer mistakes, the importance of rigorous vetting, and why Item 20 is a key focus for negotiating leverage. Adam highlights industries with complex legalities and warns that an FDD doesn’t guarantee a successful system. With a call for responsible franchising, he emphasizes the need for alignment between franchisors and franchisees for mutual success.
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FDD Is Not A Safety Net
- An FDD alone doesn't guarantee a proven, low-risk system for buyers.
- Many prospects overtrust franchisors who are incentivized to sell, so dig deeper.
When Territory Laws Make A Franchise Impossible
- Adam once advised a prospect against a short-term rental franchise because local laws banned rentals in that territory.
- The prospect ignored him and quickly sought help to exit the agreement.
Check Item 20 First
- Start your FDD review with Item 20 to assess growth and negotiation leverage.
- Use Item 20 to judge whether you can negotiate contract points with the franchisor.
