Overview

The FDD Consistency Audit Report ensures that your website content is accurate, compliant, and fully aligned with your Franchise Disclosure Document (FDD). This audit validates that all public-facing claims match the disclosures contained in the FDD and comply with the FTC Franchise Rule as well as applicable state franchise disclosure laws.

Special emphasis is placed on Item 19 Financial Performance Representations (FPRs) to ensure no unsubstantiated earnings claims are made—particularly in states with heightened disclosure requirements. By identifying inconsistencies or omissions, this audit helps reduce legal risk related to misrepresentation, fraud, regulatory violations, and enforcement actions.

Not all FDD items are required for every franchise system. This audit evaluates only the items applicable to your brand based on your FDD structure and disclosures.

What This Audit Evaluates

The FDD Consistency Audit compares your website’s marketing content, claims, and representations against your official FDD across all 23 FDD items, where applicable. Each component is reviewed for:

• Accuracy and consistency with the FDD

• Proper disclosure and qualification

• Risk of unsubstantiated or misleading claims

• Alignment with FTC and state-level franchise regulations

Findings are categorized by status, severity, and priority to guide remediation efforts.

Key Areas of Review by FDD Item

Item 1–4: Franchisor Background & Legal History

• Corporate background, parent companies, affiliates, predecessors

• Industry overview

• Executive and leadership experience

• Litigation history, criminal matters, injunctions

• Bankruptcy disclosures (franchisor and officers)

Item 5–7: Initial & Ongoing Costs

• Franchise and initial fees

• Training, territory, and technology fees

• Ongoing royalties and brand fund contributions

• Build-out costs, equipment, signage, and inventory

• Opening marketing spend and working capital

Item 8–10: Supply Chain, Obligations & Financing

• Approved and required suppliers

• In-house purchasing and rebates

• Operational supply chain obligations

• Franchisor and third-party financing programs

• Lease and equipment financing restrictions

Item 11–12: Support, Training & Territory

• Initial and ongoing training programs

• Operations manuals and marketing support

• Technology systems and site selection assistance

• Territory protections, encroachment, and relocation rules

Item 13–14: Intellectual Property

• Trademarks, registrations, and disputes

• Brand usage restrictions

• Patents, copyrights, trade secrets

• Software licensing and proprietary processes

Item 15–16: Franchisee Participation & Offerings

• Owner involvement and management requirements

• Absentee ownership conditions

• Approved and prohibited products or services

• Menu, pricing, and offering restrictions

Item 17: Renewal, Transfer & Termination

• Renewal and termination rights

• Default conditions and transfer rules

• Dispute resolution procedures

• Governing law provisions

Item 18: Endorsements & Public Figures

• Endorsements or influencers

• Paid public figures

• Use of names, likenesses, or testimonials

Item 19: Financial Performance Representations

• Earnings ranges and revenue disclosures

• Gross and net revenue

• Cost structures and profitability

• Break-even data and unit-level benchmarks

• Cohort performance and operational KPIs

Item 20–21: System Performance & Financials

• System size, growth, and attrition

• Transfers, terminations, non-renewals

• Franchisee contact information

• Audited financial statements and notes

Item 22–23: Agreements & Acknowledgements

• Franchise and development agreements

• Territory riders and guarantees

• Technology and lease addenda

• FDD receipt acknowledgements and delivery confirmations

Why This Audit Matters

An FDD-consistent website protects your brand by:

• Reducing legal exposure to FTC and state enforcement

• Preventing unintentional earnings claims

• Maintaining trust with prospective franchisees

• Ensuring marketing teams stay within compliance boundaries

• Supporting scalable franchise growth with lower regulatory risk

This audit provides a clear, structured roadmap for aligning your website with your FDD—before issues escalate into legal or reputational consequences.