Requirements for Financial Statements the Franchisors Must Provide in the FDD

Apr 17, 2020 | Franchise Education

FranNet CEO, Jania Bailey explains that it is a requirement to have three years of audited financial statements in the FDD. The exception to that rule might occur when you are dealing with a new franchise brand that hasn’t been around for 3 years. In those cases, you might only see an unaudited balance sheet. However, if the franchise has 1-year operating results, it now requires an audit. Remember that the FDD is a requirement of the Federal Trade Commission, so these things are not optional.