Thinking About Opening a Car Loan Franchise? Review the Franchise Disclosure Document Carefully
When opening a car loan franchise with Byrider, you’ll operate your business within the terms outlined in our franchise disclosure document (FDD) and franchise agreement. In fact, every franchise brand has its own FDD: a document that spells out exactly what franchisees are entitled to, and what’s expected of them. If you’re new to franchising, it’s important that you have a good understanding of this document and its purpose before making any agreements.
What is an FDD?
The purpose of an FDD is to help prospective franchisees get all the important information they’ll need about their investment. It comes in a standardized format that all franchises follow. When you sign any franchise agreement, your signature indicates that you’ve read and understand the FDD, and that you agree to its terms.
When you open a car loan franchise with Byrider, this process is no different. Franchisors are required to give prospective franchisees at least two weeks to review the FDD carefully before they’re presented with a franchise agreement. At Byrider, we’re always happy to answer questions and clarify our FDD during those two weeks. It’s also a good idea to consult with an attorney to ensure you don’t miss any details.
What’s Included in an FDD?
All FDDs go over the same 23 items (although Item 19, which covers potential earnings, is optional). While it’s important to read and understand the entire document, a few key items include:
- Items 5 & 6 (on fees)
- Item 7 (on the franchisee’s estimated initial investment)
- Item 9 (on obligations of the franchisee)
- Item 11 (on obligations of the franchisor)
By the time you finish reading the FDD, you should have a clear idea of what you can expect to spend and how the franchisor will support you in getting your business up and running. Opening a car loan franchise with Byrider comes with plenty of support: you can read about it on our website, but the best way to get all of the details is to request a copy of our FDD.
How Do I Find an FDD?
If you’re trying to access the FDDs of brands you’re interested in partnering with, you’ve probably noticed that they’re oftentimes not freely available – you’ll likely need to contact the franchisor directly to get their FDD.
Because FDDs contain complex legal information, many franchisors want to ensure that prospective investors are qualified and genuinely interested before they provide them with a copy of their full FDDs. That being said, many franchisors make key information from their FDD available on their websites. If you’re interested in opening a car loan franchise with Byrider, you can find a lot of investment information on our site!
Keep in mind, sometimes third-party websites claim to offer FDDs from a range of franchise brands. Often these FDDs are out of date and could even be inaccurate. The best way to ensure you’re getting the best and most recent information is to contact the franchisor directly.
If you’re ready to get the details on opening a car loan franchise, contact Byrider today and request a copy of our FDD!