Based on analysis of 192 franchises in FranchiseStack's database, the FDD is the definitive source for comparing investment requirements and fee structures. Our data shows that FDD-disclosed initial investments range from as low as $3,000 for eXp Realty to over $4.7 million for Burger King. By reviewing the 23 mandatory items, investors can identify critical differences in royalty structures, which vary from 0% at brands like RE/MAX and Ace Hardware to 43% at 7-Eleven.
The 23 items cover the franchisor's history, litigation, bankruptcy, initial fees, other fees (royalties), estimated initial investment, restrictions on sources of products, franchisee obligations, and financial statements.
Item 19 is the Financial Performance Representation. It is the only section where a franchisor can provide specific data on the historical sales, expenses, or profits of existing franchise locations.
Under the FTC Franchise Rule, a franchisor must provide the FDD to a prospective franchisee at least 14 calendar days before they sign a binding agreement or pay any fee.
While most franchises like Subway (8%) or McDonald's (4%) use a percentage, some brands like RE/MAX or Kumon disclose 0% royalties in their FDD, often utilizing flat fees or alternative revenue models instead.
The FDD is a disclosure document intended to provide information for due diligence, whereas the Franchise Agreement is the actual legal contract that governs the relationship once signed.
FranchiseStack analyzes 192+ franchises with verified FDD data, investment requirements, and performance metrics.
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