Methodology
How FDD Insight Works
A plain-English explanation of our extraction process, citation verification, and the limits of what AI-assisted analysis can and cannot do.
How the analysis works
You upload a text-based FDD PDF
Our system extracts the full text from your PDF using document parsing. Text-based PDFs work best. Scanned, image-only, or password-protected files may not extract correctly and will be flagged.
AI extracts all 23 FDD Items
A large language model reads the full document and extracts structured data from each of the 23 required FDD Items, including fees, obligations, territory rights, financial performance data, and outlet history.
Every finding is cited to a source page
Each extracted fact is tied back to a specific page in the source document. Citations are then verified against the original text using three tiers: exact text match, nearby text match, and page-range verification. Only findings with verified source citations appear in your report.
Red flags are identified with commercial context
A synthesis model reviews all 23 Items and identifies commercially significant issues — fee structures, renewal risks, territory limitations, non-compete scope, outlet trends — with plain-English explanations and recommended diligence actions.
What the report includes
- ✓All 23 FDD Items extracted and summarised
- ✓Red flags by severity (HIGH, MEDIUM, LOW)
- ✓Commercial concern analysis per red flag
- ✓Recommended diligence actions
- ✓Initial investment breakdown (Item 7)
- ✓Fee schedule analysis (Item 6)
- ✓Renewal and termination summary (Item 17)
- ✓Territory and exclusivity analysis (Item 12)
- ✓Item 19 financial performance extraction
- ✓Outlet trend analysis (Item 20)
- ✓Page-level citation verification
- ✓Downloadable PDF report
Citation verification
How Citation Verification Works
The exact quoted text was found on the cited page in the source document.
The quoted text was found within a few pages of the cited page, accounting for document formatting differences.
The citation page falls within the verified page range for that FDD Item, confirming the finding is grounded in the correct section of the document.
Findings that cannot be verified are flagged rather than presented as confirmed facts.
What This Analysis Cannot Do
- ✕It is not legal advice and does not create an attorney-client relationship
- ✕It does not assess whether contract provisions are enforceable under the law of your state
- ✕It does not evaluate the commercial viability of a specific franchise location or market
- ✕It does not replace validation calls with current and former franchisees
- ✕It does not assess the financial health of the franchisor beyond what Item 21 discloses
- ✕Scanned or image-only PDFs may produce incomplete extraction — we flag this when detected
- ✕AI extraction may occasionally miss or misinterpret complex table data or non-standard FDD formatting
Professional advice
When to Bring in a Franchise Attorney
FDD Insight is designed to prepare you for attorney review, not replace it. You should engage a qualified franchise attorney before signing any franchise agreement, especially when:
- →The report identifies HIGH severity red flags
- →The FDD contains unusual termination or non-compete language
- →You are making an investment above $200,000
- →The franchise agreement includes personal guaranty provisions
- →You have questions about state-law enforceability of any clause
Our report gives your attorney a head start. Instead of spending the first hour explaining what an FDD is, you can spend it on the issues that matter most to your deal.
See it in action
See the methodology in action