In a US Franchise Disclosure Document, Items 5 and 6 address initial and other fees. Use them as the start of a payment register, then reconcile the disclosed information with the attached agreements and your proposed opening schedule.
Separate entry payments from recurring charges
Create a row for each disclosed payment and record the recipient, amount or formula, due date and stated conditions. Keep the source page and document date. A percentage without its calculation base is not ready to enter into a financial model.
Read footnotes before calculating
Investigate minimums, exceptions, introductory periods and amounts that depend on events. A fee payable on transfer belongs in an exit scenario, while a monthly fee belongs in operating cash. Neither should silently disappear because it does not occur on opening day.
Reconcile with the agreements
Ask your adviser to trace unresolved entries to the corresponding contract provisions. Cross-check payment timing against your funding plan. This worksheet organises disclosed information; it does not determine whether a fee is lawful or whether the disclosure satisfies every applicable requirement.
A worked research example
Illustrative register entry: “technology charge — fixed monthly amount — payable to named provider — starts at system activation.” That row prompts a specific question: does charging begin during fit-out, before the location has sales?
Evidence to gather
- Save the current FDD and fee pages
- Record each payment’s formula and recipient
- Read every relevant fee footnote
- Resolve timing against the attached agreements
Before you move forward
Frequently asked questions
Are Items 5 and 6 the whole operating budget?
No. Other business costs and third-party commitments still need investigation.
Should every fee go into month one?
No. Use its trigger and payment date, then include event-based fees in the appropriate scenario.
Does this check state franchise requirements?
No. Ask a qualified US adviser about the actual transaction, state requirements and any exemptions.
Sources and scope
References checked 6 November 2026. The questions, examples and diagrams are our editorial research tools; they are not statements that every franchise has the same terms.
- eCFR — 16 CFR 436.5, disclosure items
US federal disclosure-item structure; not a review of a particular offer or all state requirements.
General editorial information, not personalised legal, tax or financial advice. Confirm local requirements and the actual documents with appropriate advisers. Examples are hypothetical. Contact the editor or suggest a correction.
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