1
Franchisor, Parents, Predecessors & Affiliates
Recent ownership changes, shell-structure red flags
For Franchise Buyers
FDD Scan for Franchise Buyers in the 14-Day Review Window
Before you sign or pay, use the FTC review window to scan all 23 FDD items. Inkvex returns an attorney-ready first-pass in under 3 minutes, including Item 3 litigation, Item 17 transfer and termination traps, Item 19 earnings claims, and Item 20 outlet data.
Your Diligence Partner, From LOI to Close.
The FTC review window exists for a reason. In March 2026 the FTC ordered the largest franchisor redress in agency history against a fitness franchisor that misled buyers about opening timelines and FDD compliance. Inkvex surfaces those exact items, with jurisdiction citations, before you sign.
$17M
FTC redress, March 2026
1 in 10
SBA franchise loans default
23 items
the FTC requires
What ETA-style buyers miss in the 14-day review
Most franchise buyers read the FDD once, slowly, with no system. Inkvex reads it the way an M&A diligence team would. Here are three places the deal usually shifts after closing:
Item 7 startup costs that double
FTC enforcement in 2026 named buildouts that took 12+ months instead of the disclosed 6, with franchisees absorbing months of carrying cost. Inkvex flags Item 7 ranges that look tight and surfaces the assumptions behind them.
Item 12 territory that is not what it sounds like
Exclusive territory and protected territory mean different things. Inkvex reads the actual language, cites the FDD section, and notes when reserved rights, alternative channels, or franchisor-operated outlets are carved out.
Item 20 turnover the franchisor does not highlight
Closures, transfers, and non-renewals tell a story the franchisor will not put in marketing. Inkvex pulls Item 20 outlet history, calculates churn signals, and tells you which prior franchisees to call before signing.
What we scan, item by item
Every FDD follows the same 23-item framework mandated by the FTC. Inkvex reads every item and surfaces the specific traps buyers miss.
2
Business Experience
Executive turnover and experience gaps that predict operational drift
3
Litigation
Patterns of franchisee lawsuits vs routine litigation
4
Bankruptcy
Any bankruptcy history of the franchisor or its executives
5
Initial Fees
Hidden add-ons beyond the headline franchise fee
6
Other Fees
Royalty, tech, advertising, audit, and transfer fees stacked together
7
Estimated Initial Investment
Low-end vs high-end spread and working-capital assumptions
8
Restrictions on Sources of Products & Services
Required-vendor kickbacks that quietly inflate COGS
9
Franchisee's Obligations
Operational obligations that materially constrain the owner
10
Financing
Franchisor-offered financing terms vs market standard
11
Franchisor's Assistance, Advertising, Computer Systems, Training
What the franchisor actually provides vs marketing language
12
Territory
Protected territory definitions and encroachment risk
13
Trademarks
Ongoing disputes or limitations on the brand you are buying
14
Patents, Copyrights & Proprietary Information
IP ownership and confidentiality scope
15
Obligation to Participate in Operation
Absentee-ownership restrictions and passive-investor clauses
16
Restrictions on What Franchisee May Sell
Menu or product restrictions that cap revenue upside
17
Renewal, Termination, Transfer & Dispute Resolution
Termination triggers, transfer restrictions, renewal traps
18
Public Figures
Celebrity endorsements and how much you are paying for them
19
Financial Performance Representations
Averages vs medians distortion, unit-level failure rates
20
Outlets and Franchisee Information
Transfer, termination, and closure rates in the unit data
21
Financial Statements
Franchisor solvency warning signs
22
Contracts
Every agreement you will sign, flagged for buyer-hostile terms
23
Receipts
The FTC-mandated receipt clock and how it interacts with your cooling-off period
How it works
- 1Upload
Add the FDD PDF and any related franchise agreement or development document.
- 2Analyze
Inkvex scans the 23-item structure in under 3 minutes and flags source-backed issues.
- 3Download
Export the report and forward it to your franchise attorney before the next call.
Attorney quote vs Inkvex
You still need a franchise attorney. Inkvex makes their job faster, you arrive at the billable hour already knowing which 3 items to focus on.
FDD Scan FAQ
Is my FDD info kept private? Who else can see what I upload?
Original FDD files are processed in memory and discarded when analysis completes. What's saved if you sign in: the structured report (flagged items with quoted clauses) and the document type, for example "FDD" or "commercial lease", so we can see which document types are most useful and improve the product. Anthropic processes the document for AI analysis under their default no-training policy. Inkvex does not sell your data or use your contract content to train AI models. For full detail see /trust and /privacy.
Can I share the report with my franchise attorney?
Yes. The report is built to forward to counsel. It gives your attorney a sourced issue list, quoted clauses, and follow-up questions so legal time starts narrower.
What about multi-unit or area development FDDs? Can you scan those?
Yes. Use the 3 uploads included with FDD Scan for the FDD, franchise agreement, and area development agreement. The report flags development schedules, cross-default exposure, territory limits, and Item 17 consequences.
How does the report handle Item 19 earnings claims?
The scan separates the headline claim from the support behind it. It looks at sample size, averages versus medians, exclusions, company-owned versus franchisee-owned units, and whether the claim depends on assumptions a buyer should verify.
Do you cover Item 20 outlet and franchisee data accurately?
Yes. The report reads Item 20 tables for openings, closures, transfers, terminations, non-renewals, and franchisee contact data. If the table format blocks confident extraction, the report marks uncertainty and pushes that point to attorney follow-up.
What if I want a refund?
Email support@inkvex.app within 14 days of any charge for a full refund. After 14 days, payments are non-refundable except where required by law. Searcher Sub subscriptions can be canceled anytime; access runs to the end of the current billing cycle.
How do I run this before my 14-day review window closes?
Upload the FDD as soon as you receive it. The scan runs in under 3 minutes, then you can send the report to your franchise attorney before the review window compresses. If the franchisor sends revised documents, use another upload for the updated version.
Can I run multiple FDDs if I am comparing 2 or 3 brands?
Yes. FDD Scan includes 3 uploads over 30 days. If you are comparing more brands or reviewing a broader acquisition stack, use /pricing to choose between FDD Scan, Searcher Sub, and Deal Pack.
Private uploads
Your FDD file and extracted text are processed in memory and discarded after analysis. The structured report, the flags, not the original document, and the document type (FDD, commercial lease) are saved to your dashboard.
Attorney first-pass
Legal information, not legal advice. Built to help counsel start with surfaced issues.
14-day refund window
Email support@inkvex.app within 14 days of any charge for a full refund.
Run the scan before your franchise attorney call. Show up with a narrowed list.
Your Diligence Partner, From LOI to Close.
Inkvex provides legal information, not legal advice. Use this as a first-pass for your franchise attorney. The FTC review window gives franchise buyers time to review the FDD before signing or paying. Inkvex does not extend, pause, or replace any legal deadline.