By Keith L. Gross, Esq. · Gross Law Group, P.A. · Last reviewed October 23, 2026
Key takeaways
- An FDD must be current as of the close of the franchisor's most recent fiscal year, and the franchisor has 120 days after year-end to prepare the revised document (16 CFR § 436.7(a)).
- Between annual updates, the franchisor must prepare quarterly revisions for any material change (§ 436.7(b)).
- If the franchisor unilaterally and materially changes the franchise agreement during a sale, the buyer must get the revised agreement seven calendar days before signing (§ 436.2(b)).
- Florida does not register FDDs, but the Florida franchise exemption notice under Fla. Stat. § 559.802 lasts one year and must be renewed each year to stay in effect.
- Florida's Deceptive and Unfair Trade Practices Act can treat a violation of FTC rules as a violation of Florida law (Fla. Stat. § 501.203(3)(a)).
Who this article is for
This article is for franchisors planning their annual compliance calendar and for prospective franchisees who want to know whether the FDD in front of them is current. It assumes you already know what an FDD is; if not, start with our Florida franchise law guide.
The annual update: 120 days after fiscal year-end
The FTC Franchise Rule requires that all information in the disclosure document be current as of the close of the franchisor's most recent fiscal year. After the fiscal year closes, the franchisor must, within 120 days, prepare a revised disclosure document, "after which a franchise seller may distribute only the revised document and no other disclosure document" (16 CFR § 436.7(a)). For a franchisor with a December 31 year-end, the update is due around the end of April.
The annual update is more than a date change. It typically refreshes the litigation and bankruptcy history (Items 3 and 4), fees and initial investment (Items 5 through 7), outlet and franchisee data (Item 20), any financial performance representation (Item 19), and the financial statements (Item 21), which generally must be audited (16 CFR § 436.5(u)). The audit is often the item that controls the schedule, so franchisors usually line up their auditors well before year-end.
If the franchisor's first quarterly update is due before the annual update is finished, the annual update must include it, either in the body of the document or through an addendum (§ 436.7(c)).
Quarterly revisions for material changes
The Rule does not let a franchisor wait a full year to disclose significant developments. Within a reasonable time after the close of each fiscal quarter, the franchisor must prepare revisions to be attached to the FDD reflecting any material change to the disclosures, and each prospective franchisee must receive the FDD together with the quarterly revisions for the most recent period available (§ 436.7(b)). Quarterly financial information does not have to be audited if the revision says so (§ 436.7(e)).
Whether a change is material is a judgment that depends on the system and the facts. Examples franchisors commonly evaluate include:
- New litigation, arbitration, or regulatory actions that Item 3 would require to be disclosed, or a bankruptcy covered by Item 4
- Changes to initial fees, royalties, technology fees, or other recurring fees (Items 5 and 6) or to the estimated initial investment (Item 7)
- New required suppliers, rebates, or purchasing restrictions (Item 8)
- Changes in territory policies or the franchisor's reserved rights (Item 12)
- A challenge to, loss of, or change in the status of a principal trademark (Item 13)
- Changes in key management (Item 2) or in the franchisor's financial condition
- Changes to the franchise agreement or other agreements attached to the FDD (Item 22)
Item 19 has its own rule. When furnishing an FDD, the franchise seller must notify the prospective franchisee of any material changes that the seller knows or should have known occurred in the information in an Item 19 financial performance representation (§ 436.7(d)). For more on Item 19, see our article on FDD Item 19.
Changing the franchise agreement during a sale
Franchisors sometimes revise the form agreement while a deal is pending. The Rule requires a copy of each revised agreement to be furnished at least seven calendar days before the prospective franchisee signs it when the franchisor alters the terms unilaterally and materially. Changes that arise from negotiations initiated by the prospective franchisee do not trigger the seven-day period (16 CFR § 436.2(b)). The separate 14-calendar-day rule still applies to delivery of the FDD itself before any binding agreement or payment (§ 436.2(a)).
Renewals with existing franchisees
Renewals raise a related question. Extending or renewing an existing franchise without an interruption in operations is not a "sale of a franchise" under the Rule unless the new agreement contains terms and conditions that differ materially from the original agreement (16 CFR § 436.1(t)). Because many systems require renewing franchisees to sign the then-current form, which may differ substantially from a ten-year-old agreement, franchisors should decide in advance how they will handle disclosure at renewal. Item 17 must also describe what "renewal" means in the system (§ 436.5(q)).
Florida's annual exemption renewal
Florida does not register or review FDDs. Instead, Florida's Sale of Business Opportunities Act exempts the sale of a franchise if the franchise meets the FTC definition and, before offering or selling a franchise to be located in Florida or to a Florida resident, the franchisor files a notice with the Florida Department of Agriculture and Consumer Services stating that it is in substantial compliance with the FTC Rule, with a fee of no more than $100. The exemption lasts one year from filing and may be renewed each year with a renewal notice and a fee of no more than $100 (Fla. Stat. § 559.802(2); see also FDACS). Many franchisors calendar this renewal alongside their annual FDD update.
Florida law adds consequences for getting disclosure wrong. Fla. Stat. § 817.416 makes it unlawful to intentionally misrepresent the prospects or chances for success of a franchise, and Florida's Deceptive and Unfair Trade Practices Act defines a violation to include violations of rules promulgated under the FTC Act (Fla. Stat. § 501.203(3)(a)).
Franchisors selling in more than one state
Franchisors that sell in registration or notice-filing states face additional renewal and amendment deadlines set by each state, and those deadlines do not always line up with the federal 120-day rule or with one another. Our Florida franchise law guide lists the states that currently require registration or a notice filing. A single compliance calendar that covers the fiscal year-end, the audit, the federal update, each state renewal, and the Florida exemption renewal reduces the risk of a gap in which the system cannot lawfully sell.
What a stale FDD can mean
Selling with a disclosure document that is out of date or missing a material change can expose the franchisor to FTC enforcement, state claims, and rescission or damages demands from the franchisee who bought on outdated information. For a prospective franchisee, the issuance date on the cover page, the fiscal year of the financial statements in Item 21, and any attached quarterly revisions are quick signals of whether the document is current; questions about what those signals mean are worth raising with counsel before you sign.
How Gross Law Group helps
Gross Law Group's franchise practice prepares annual FDD updates, quarterly amendments, and Florida exemption filings for franchisors, and reviews FDDs and franchise agreements for prospective franchisees. See our Florida FDD drafting and review page, our FDD review services, or our franchise law practice.
Frequently asked questions
What is the deadline for a franchisor's annual FDD update?
The FTC Franchise Rule requires a revised disclosure document within 120 days after the close of the franchisor's fiscal year, after which a franchise seller may distribute only the revised document (16 CFR § 436.7(a)). For a December 31 fiscal year-end, that is about the end of April.
Do we have to amend the FDD between annual updates?
Yes, when there is a material change. The Rule requires the franchisor, within a reasonable time after the close of each fiscal quarter, to prepare revisions reflecting any material change, and prospective franchisees must receive the most recent quarterly revisions with the FDD (16 CFR § 436.7(b)).
Does Florida require franchisors to file or register an FDD?
No. Florida does not register or review FDDs. A franchisor that wants the franchise exemption from Florida's Sale of Business Opportunities Act files a notice with the Florida Department of Agriculture and Consumer Services under Fla. Stat. § 559.802. The exemption lasts one year and can be renewed each year.
Do renewing franchisees need a new FDD?
Not always. Under the Rule, extending or renewing an existing franchise without an interruption in operations is not a "sale of a franchise" unless the new agreement contains terms and conditions that differ materially from the original agreement (16 CFR § 436.1(t)). If the renewal form is materially different, disclosure obligations can apply.
What if the franchisor changes the franchise agreement after I receive the FDD?
If a franchisor unilaterally and materially changes the agreement attached to the FDD, it must give you the revised agreement at least seven calendar days before you sign it. Changes that come out of negotiations you initiated do not trigger that seven-day period (16 CFR § 436.2(b)).
About the author
Keith L. Gross, Esq. is the founding attorney of Gross Law Group, P.A. His practice focuses on franchise law and trademarks for franchisors and franchisees. Before law school he built several businesses. He is admitted to practice in Florida.
Disclaimer: This article is general information about the law as of the review date above. It is not legal advice and does not create an attorney-client relationship. The right answer depends on your specific facts and documents. Consult a licensed attorney before updating, amending, or relying on a Franchise Disclosure Document. See our full disclaimer.