The Franchise Agreement can only be signed by someone after they have signed the Franchise Disclosure Document Receipt and they have completed waiting the mandatory 14 day waiting period. During that 14-day period is the time that the candidate should’ve had the agreement reviewed by their own legal representative. The agreement is within the FDD, so when the time comes to sign the Franchise Agreement, they’ve already had time to review, develop questions, etc.

If a candidate has any change requests, those should be submitted and shared with your Spadea Lignana legal team so it is reviewed, approved, an addendum can be drafted and it can be recorded properly. If over time you start to get multiple same requests for changes within the document, let your legal team know so it can be reviewed at renewal time to see if those frequent changes could become part of the document in the following year to help prevent frequent changes, reviews and addendums to be made.

  • Once your documents are completed by your legal team, you will receive two email templates containing links to share with candidates for access to your Franchise Disclosure Document and FDD Receipt (through your registration map), and the Franchise Agreement Request Form which will then notify your legal team to draft and send the candidates agreement. For FDD receipts and Agreement Request Forms, you will receive an email when a prospect accesses and another email when the prospect signs.
    • The first step to getting an agreement signed is for the candidate to complete an Agreement Request Form. This form is accessed with the link shared with you within the template email. This power form will ask the candidate to complete questions on the following: contact information, spouse and/or partner(s) information, location details (if applicable), and dated signatures (by the candidate).
      • The Agreement Request Form should only be shared after a Discovery Day, not before, to only qualified candidates.
      • Once the form is completed/received your legal team will send the full personalized franchise agreement, including any state specific items needed, to the candidate using DocuSign.
      • Common circumstances that can hold up an agreement’s processing is if the entity for prospect is not in their state systems yet; you want them signing as their entity and as an individual.
  • Through your DocuSign account access, you can check the status of pending signatures at any time. You will also receive an emailed copy of the agreement when it has been fully executed.
  • After your fiscal year end you have up to 120 days to continue to use your then current FDD before it is stale under the FTC. Some states have a shorter window of time in which you can continue to use your “old” FDD. You should start thinking and working towards completing updates for your FDD prior to your fiscal year end and we urge you to work closely with your Spadea Lignana team in order get your new FDD ready for renewal as soon as possible. Once you have an updated FDD, you will then file in the registration states for the first time or with renewals.

Even though Signing the Franchise Agreement may be the last step within the Sales Process – your next steps will roll right into Franchisee Onboarding. Many of these onboarding steps will follow the materials within your Operations and Training Manuals.  There are companies in the industry that will create or help with the sales process, manuals, and will have a variety of best practices ready to share. If you’re interested in learning more about those types of services, contact the Client Relations team for introductions.

Best Practice

If a new FDD is issued, any candidates going through your sale process who haven’t yet executed (signed) agreements would need to be redisclosed with the new FDD. Thus, starting a new 14 day waiting period once the new version is signed.

Keep this in mind when nearing the 120 days after your fiscal year end. We advise against disclosing a candidate when there are less than 16 days left in your fiscal year, since there will not be enough time to sign an agreement.