What the FDD Won’t Tell You: 7 Questions Every Buyer Should Ask

The Franchise Disclosure Document (FDD) is one of the most important tools a prospective franchisee receives during the buying process. It contains 23 items that franchisors are legally required to disclose, covering everything from startup costs to litigation history. But here’s the truth: even the most comprehensive FDD doesn’t tell you everything you need to know.

The FDD is designed to meet legal standards, not necessarily to help you make the best decision. It often leaves out operational struggles, financial pitfalls, and franchisee dissatisfaction. To protect yourself, you need to dig deeper.

Here are seven questions every prospective franchisee should ask that the FDD likely won’t answer.

How Many Franchisees Are Actually Profitable? While the FDD may include an Item 19 with financial performance representations, most franchisors only disclose gross revenue. They often omit key information like net profit, owner salary, or cost of goods sold. Without this, you can’t determine what it truly takes to break even.

Ask this instead: What percentage of current franchisees are taking home a profit after expenses? Better yet, speak directly to existing franchisees.

How Much Support Will I Really Receive After Opening? FDDs list training and support, but that doesn’t mean you’ll receive quality help when you need it. Some systems promise ongoing support but are slow to respond once your doors are open.

Ask this: What specific support will I receive during my first 90 days? Who do I call when I’m in crisis? Again, franchisees are your best source for the real story.

What Do Existing Franchisees Really Think of the System? Franchisors aren’t required to conduct or publish satisfaction surveys. Even if franchisees are unhappy, the FDD won’t reflect it unless lawsuits or terminations have occurred.

Ask this: If you could do it all over again, would you still buy into this system? That one question reveals more than any brochure ever will.

What Are the Day-to-Day Operational Challenges? The FDD doesn’t walk you through the daily grind. Are labor costs hard to control? Are suppliers reliable? Are marketing systems effective? You won’t know unless you ask.

Ask this: What are your three biggest challenges as a franchisee in this system? Listen for recurring patterns.

Are There Any "Unofficial" Costs I Should Be Aware Of? Many franchisees report unexpected expenses: inflated supply costs, hidden tech fees, or mandatory marketing programs that don’t deliver ROI. These costs may be technically disclosed, but not emphasized.

Ask this: What costs surprised you the most after opening? or What do you spend money on that you didn’t expect to?

How Accurate Are the Startup Cost Estimates? Item 7 outlines estimated startup costs, but they are just that—estimates. Franchisors often base these on outdated data or ideal scenarios that don’t reflect local conditions or delays.

Ask this: What did your actual startup costs end up being? and Where did you go over budget? Compare answers across multiple franchisees.

Why Are Franchisees Leaving the System? Item 20 lists closures, terminations, and transfers within the last calendar year, but it won’t explain why those franchisees left. Was it due to financial failure? Lack of support? Unrealistic expectations?

Ask this: Do you have the phone numbers for franchisees who have left the system prior to last year-end? They may offer the most unfiltered insight you can get. Do not request that the franchisor provide you with a list. They will usually curate that list to those franchisees they believe would portray them in the best light.

The FDD is a crucial starting point—but it’s not the whole truth. The most important information lives outside the document, in conversations with franchisees, former operators, and franchise attorneys.

Franchise success isn’t just about what’s disclosed on paper. It’s about asking the right questions, pressing for clarity, and refusing to sign until you have the full picture.

Because once you sign, it’s too late for a reality check.