Before furnishing an FDD to a prospect, you must confirm that the prospect has been given, or must give the prospect, notice of the FDD formats available, and the prerequisites and conditions for obtaining those formats.
The law does not require the notice to be in writing or to be acknowledged. The notice may be given personally, by telephone or in writing by paper or electronically.
However, as a matter of policy, a franchisor may require the notice to be in writing, and may require the prospect to sign or initial an acknowledgment of the notice. This type of policy protects the franchisor and you from later claims by prospects that they were not given the notice.
The notice must be given to a prospect before an FDD is furnished to the prospect. If the notice is posted on the franchisor's website or included in the franchisor's marketing materials or franchise application form, and if the prospect has visited the website, received the marketing materials or submitted an application form, the prospect has been given notice.
However, you should not assume this to be the case. You should confirm that the prospect has been given notice, or you should give the prospect notice, before you furnish an FDD to the prospect. You should be particularly careful if you are dealing with a prospect who meets you at a trade show, a renewing franchisee, a current franchisee buying an additional franchise, or a transferee of a current franchisee.
These types of prospects are least likely to have been given the notice.
The notice must be given whether the franchisor uses just paper FDDs, just electronic FDDs, or both paper and electronic FDDs. The specific wording of the notice is not prescribed by law.
If a franchisor uses both paper and electronic FDDs, the notice could state:
Notice of Available Disclosure Formats
If you qualify as a franchisee prospect, we will furnish you with our franchise disclosure document in paper form unless you request an electronic copy by sending an email request to [name, title] at [email @franchisor]. We will provide the paper form of our franchise disclosure document to you in person if you visit our offices, or we will mail or courier the document to you at our cost. We will provide the electronic form of our franchise disclosure document to you in PDF format, sent by email to the address you provide to us. You will need to have Adobe Reader software installed on your computer to open and view the PDF document and a printer to print at least one Receipt page.
If a franchisor uses just paper FDDs, the notice could state:
Notice of Available Disclosure Formats
If you qualify as a franchisee prospect, we will furnish you with our franchise disclosure document in paper form. We will provide the document to you in person if you visit our office, or we will mail or courier the document to you at our cost.
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