GLOSSARY
FDD Item 5
Item 5 is the FDD section disclosing the initial franchise fee — including, when the fee is not uniform, the conditions under which it varies and often the actual range collected.
Item 5 states what you pay the franchisor before opening: the initial franchise fee, plus any other pre-opening payments to the franchisor. Federal rules (16 CFR 436.5(e)) require the franchisor to describe the conditions of any non-uniform fee — which is why Item 5 is where discounts leave a paper trail. Franchisors that varied the fee in the prior year routinely print the real range they collected.
That makes Item 5 the only franchisor-authored evidence that a published fee is negotiable. A brand that instead states its fee is "imposed uniformly" has documented a refusal to discount — which is equally worth knowing before you ask.
Related