What Is Item 22 in an FDD? The Contracts Exhibit Pack

Item 22 — Contracts is one of the shortest items in the FDD by page count and one of the most consequential by what it points to. The item itself is usually a single list. Behind that list sit the actual agreements the franchisee will sign — frequently 100 pages or more of binding legal text that govern the next ten or twenty years of the relationship.

What Item 22 requires

The FTC Franchise Rule at 16 CFR §436.5(v) requires the franchisor to attach a copy of all proposed agreements that the franchisee will be required to sign in connection with the franchise, and to list each one in Item 22.

In practice, the list typically includes:

• The franchise agreement itself — the master contract that grants the franchise, sets the term, defines the territory, and establishes royalty and ad fund obligations.
• Area development agreement or multi-unit development agreement, if the franchisee is committing to open multiple units on a schedule.
• Subfranchise agreement or master franchise agreement, if the franchise is structured through a subfranchisor.
• Personal guaranty of the franchise agreement, typically signed by individual owners of a corporate franchisee.
• Lease and lease addendum or collateral assignment of lease, where the franchisor steps in if the franchisee defaults — and the form letter the franchisee's landlord must sign.
• Software, technology, and POS system agreements, including end-user license terms for proprietary point-of-sale systems and reservation platforms.
• Confidentiality and non-compete addenda signed by the franchisee's employees, managers, or owners.
• Promissory notes and security agreements, if the franchisor is financing any portion of the initial fee or equipment purchase.
• Release agreements signed at renewal or transfer.
• Sublease agreements where the franchisor is the tenant and the franchisee is the subtenant.
• Supplier or product purchase agreements, where the franchisee commits to buying specific products from the franchisor or designated suppliers.
• Forms of state-specific addenda that modify the franchise agreement to comply with state franchise registration laws.

The list itself is brief. Each agreement is then attached as a separate exhibit at the back of the FDD. A retail or restaurant franchisor's full exhibit pack frequently runs 150 to 300 pages.

What it actually tells you

Item 22 is a completeness check. The rule's purpose is to ensure that no document the franchisee will be required to sign is held back until after the FTC-mandated 14-day waiting period (see Item 23) has elapsed. If a contract is not listed in Item 22 and not attached as an exhibit, the franchisor cannot lawfully require the franchisee to sign it as a condition of becoming a franchisee.

For a prospective buyer, the practical implications are:

Every binding promise lives in the exhibits. The narrative items (1 through 23) summarize and characterize. The exhibits are the actual contracts. When narrative and exhibits disagree, the exhibits control. A diligent reading of an FDD spends as much time in Items 22's exhibits as in the rest of the document combined.

The franchise agreement is the longest exhibit and the most important. It typically governs term length, territorial rights, renewal conditions, transfer restrictions, default and cure provisions, post-termination non-competes, dispute resolution venue, and choice of law. Each of these provisions has financial consequences in scenarios that look unlikely at signing and become very real later.

Personal guaranties are typically presented as standard terms. Negotiation is uncommon for single-unit franchisees. A personal guaranty exposes the individual signer's personal assets — home, savings, other property — to claims under the guaranty's terms. The protection an LLC or corporation normally gives owners does not extend to obligations the owner has personally guaranteed. The guaranty is generally listed as a separate document so the signing parties and scope are unambiguous.

State addenda modify, not just translate. The thirteen registration states (California, Hawaii, Illinois, Indiana, Maryland, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin) require franchisors to register their FDD locally and add state-specific tweaks to the contract. Those tweaks are stapled to the back of the FDD as "state addenda" — for example, limits on which state's courts can hear disputes, or extensions of the deadline for a franchisee to sue. A California franchisee's agreement is materially different from a Texas franchisee's, even when the brand is the same.

What it does NOT tell you

Several common misreads of Item 22:

• Listing is not negotiating. Item 22 tells you what contracts exist; it does not tell you which terms the franchisor will or won't negotiate. In practice, large franchisors negotiate very little for single-unit franchisees and somewhat more for multi-unit operators with development commitments.
• Item 22 is not the only place contracts appear. Some agreements you will sign — for example, agreements with the franchisor's preferred third-party vendors — may not be required by the franchisor and therefore may not appear in Item 22, even though declining them changes your unit economics.
• The forms attached are templates. The actual agreement you sign may have schedules, specific territory definitions, opening-date commitments, and personalized financial terms that the template doesn't show. Always read the form executed for your unit, not just the FDD's blank form.
• Item 22 doesn't price anything. Costs and fees are in Item 5 (initial fees), Item 6 (other ongoing fees), and Item 7 (initial investment). The contracts in Item 22 enforce them, but the dollar figures are elsewhere.

Reading tips

A practical approach to Item 22's exhibits:

1. Inventory the list first. Cross-check that every contract listed in Item 22 has a corresponding exhibit attached. Missing exhibits are unusual and worth flagging.
2. Read the franchise agreement end to end at least once. Pay particular attention to: term length and renewal mechanics, territorial rights and reserved rights of the franchisor, transfer rights and conditions, default and cure periods, post-termination obligations and non-competes, dispute resolution venue and method, choice of law.
3. Map the personal guaranty. Identify exactly who is signing personally, what the guaranty covers, and whether it survives transfer or termination.
4. Read the technology and software agreement. These are commonly skipped and often contain unilateral right-to-update clauses, data ownership provisions, and fees that escalate over time.
5. Compare state addenda. State addenda often improve franchisee rights relative to the base agreement; confirming they apply to a particular transaction is a standard part of legal review.
6. Note where legal review tends to focus. Most franchise-experienced attorneys review the exhibit pack as a unit, flag terms that diverge from market practice, and identify the limited number of provisions where negotiation is realistic.

The contracts in Item 22 are what you are actually agreeing to. The rest of the FDD describes context and risk; Item 22's exhibits define the rights and obligations themselves. After reading the exhibits, the next page of the FDD is usually Item 23, where the franchisee acknowledges receipt of the entire document.