The FDD items that signal risk and opportunity

Item 3 — Litigation

New matters disclosed under Item 3 can indicate franchisor-franchisee friction or regulatory issues. A newly added case is a red flag worth investigating.

Items 5 & 6 — Fees

Changes to the initial franchise fee or ongoing royalty/marketing fees shift the economics of every deal. A fee change year-over-year is a meaningful signal.

Item 7 — Initial investment

The estimated initial investment range is a mandated table. A change signals rising build-out costs or repositioning.

Item 19 — Financial performance

Optional but high-value: when a franchisor adds or updates an Item 19 financial performance representation, it is the closest thing to unit economics you will find in a public filing.