2025 Franchise Disclosure Document (FDD) Overview

Disclaimer: This is general information only and not legal advice. You should always seek independent legal, accounting, and business advice before making any decision.

Success Tutoring is the United States Newest Education franchise. Founded in Sydney, Australia - Success Tutoring is making waves in the education space. Based on the US Common Standards Curriculum, Success Tutoring provides personalised English & Math tutoring on a membership, gym model approach to education.

You can access the updated Success Tutoring FDD here.

This FDD Overview will cover the following:

1. Table of Contents
2. Default & Termination
3. Franchise Payments & Fees
4. Franchisor Services and Assistance
5. Franchisee Obligations

Table of Contents

In the United States, every Franchise Disclosure Document (FDD) follows the same structure and must include the following 23 official sections:

The Franchisor and Any Parents, Predecessors, and Affiliates (Item 1), Business Experience (Item 2), Litigation (Item 3), Bankruptcy (Item 4), Initial Fees (Item 5), Other Fees (Item 6), Estimated Initial Investment (Item 7), Restrictions on Sources of Products and Services (Item 8), Franchisee’s Obligations (Item 9), Financing (Item 10), Franchisor’s Assistance, Advertising, Computer Systems and Training (Item 11), Territory (Item 12), Trademarks (Item 13), Patents, Copyrights and Proprietary Information (Item 14), Obligation to Participate in the Actual Operation of the Franchise Business (Item 15), Restrictions on What the Franchisee May Sell (Item 16), Renewal, Termination, Transfer and Dispute Resolution (Item 17), Public Figures (Item 18), Financial Performance Representations (Item 19), Outlets and Franchisee Information (Item 20), Financial Statements (Item 21), Contracts (Item 22) and Receipts (Item 23).

To make this easier to understand, here’s a breakdown of the FDD in grouped sections, using everyday language:

1. Background & Business History

(Items 1, 2, 3, 4) This section explains who the franchisor is and whether they’re part of a bigger company. It also introduces the leadership team and their experience in business. Any past lawsuits or bankruptcies must be disclosed so buyers understand the history and stability of the brand. For a company like Success Tutoring entering the U.S., this section would tell the story of its origins, ownership structure, and track record.

2. Fees & Investment

(Items 5, 6, 7, 10) This area covers all the money involved in buying and running the franchise. That includes the upfront franchise fee, ongoing royalties, marketing contributions, technology fees, and any other payments. It also outlines the total estimated cost to open the business and whether the franchisor offers or arranges financing. This helps potential franchisees plan financially before committing.

3. Franchisee & Franchisor Roles

(Items 8, 9, 11, 15) These sections explain what both sides are responsible for. They outline the franchisee’s day-to-day duties, training requirements, sourcing rules, and operational standards. They also describe what the franchisor provides, including support, marketing guidance, software systems, and training. It also clarifies whether the franchisee must personally run the business or can appoint a manager.

4. Territory, Branding & Intellectual Property

(Items 12, 13, 14) This group deals with the space or region where the franchisee can operate and whether it's exclusive. It also covers trademark rights, business names, logos, slogans, and any proprietary systems, materials, or technology. Essentially, it defines how the brand can be used and protected.

5. Operations & Restrictions

(Items 16, 18, 20) This area explains what franchisees are allowed (and not allowed) to sell, who can endorse the brand, and how franchise locations are tracked over time. It may include rules around approved suppliers, approved products, and any restrictions on business activities.

6. Legal Rights, Contracts & Dispute Resolution

(Items 17, 22, 23) This section covers what happens if there’s a dispute, breach, transfer, renewal, or termination. It also includes the legal agreements franchisees must sign and the receipt they acknowledge when receiving the FDD. This is where expectations and consequences are clearly set out.

7. Financial Performance & Statements

(Items 19, 21) Here, the franchisor may provide sales or earnings data (if they choose to) to show what franchise locations typically make. They must also include audited financial statements so franchisees can assess the financial health of the franchisor before investing.

Default & Termination

Every franchise agreement includes rules about what happens if a franchisee doesn’t follow the agreement. These are called default and termination clauses. They protect the franchisor’s brand and outline when the franchisee can lose their rights to operate.

There are two main types of defaults:

1. Defaults You Can Fix (Curable Defaults)

These are issues the franchisee is allowed to correct within a set time after being notified. If the problem is fixed within the deadline, termination can be avoided. Common curable defaults include:

• Late payments — If a franchisee doesn’t pay fees, royalties, vendor bills, or other charges on time, they usually have 15 to 30 days to catch up.
• Breaking operational rules — This includes not following the franchise system, failing inspections, skipping training, ignoring marketing requirements, or using unauthorized products. Most of these issues come with a 15–30 day cure period.
• Lease or licensing issues — If the franchisee loses a lease or required permit, they must fix it within an agreed timeframe.
• Legal or compliance issues — If the business violates laws, safety rules, or health codes, they typically have 24–72 hours to correct the issue, depending on the seriousness.

If the franchisee doesn’t fix the problem in time, the franchisor can terminate the agreement or take other action, such as suspending support, cutting off marketing access, or requiring the business to be sold.

2. Defaults You CANNOT Fix (Immediate Termination)

Some actions are considered so serious that the franchisor can end the franchise immediately with no opportunity to cure. These include:

• Unauthorized sale, transfer, or ownership changes
• Breaking non-compete, confidentiality, or intellectual property rules
• Abandoning the business (e.g., closing without notice or ignoring customers)
• Repeated defaults (multiple issues within the same year)
• Bankruptcy or insolvency
• Serious criminal behavior — including fraud, harassment, assault, drug charges, unethical conduct, or anything that harms the brand’s reputation
• Faking records or submitting false reports

In these cases, the franchisor can terminate immediately to protect the brand and the rest of the franchise network.

What Happens After Termination?

If a franchise is terminated or expires, the franchisee must stop operating under the brand immediately. This usually includes:

• Removing all branding, signs, uniforms, and trademarks
• Returning all confidential materials, manuals, and systems access
• Handing over customer data, email accounts, websites, and social media
• Stopping the sale of branded products and services
• Allowing the franchisor to transfer the phone number and listings
• Shutting down access to technology, intranet, and software systems

If the franchisee doesn't cooperate, the franchisor can legally enforce these changes and even enter the premises to make the updates at the franchisee’s expense.

Other Possible Outcomes

Instead of immediately terminating, the franchisor may decide to:

• Suspend marketing or system benefits
• Refuse discounts or support
• Force the franchisee to sell the business
• Block vendors from supplying goods
• Recover unpaid fees, interest, and legal costs

The franchisor may also have the option to buy the business, equipment, or take over the lease.

Franchisee-Led Termination Requests

If a franchisee wants to end the agreement early, they can submit a written proposal explaining:

• Why they want to exit
• Their suggested terms
• Supporting evidence

The franchisor must respond in writing within 28 days, but they are not required to accept the request.

Franchise Payments & Fees

When you buy a franchise in the U.S., there are initial costs, ongoing payments, and extra fees that may apply depending on your actions and compliance. Here’s a simple breakdown of what a franchisee can expect using Success Tutoring as an example:

1. Initial Fees (One-Time Payments Before You Start)

These are due when you sign the franchise agreement:

• Franchise Documentation Fee A $3,000 fee paid before signing. It covers the preparation of legal documents. It’s non-refundable unless the franchisor cancels the deal.
• Initial Franchise Fee The standard fee is $50,000 and is paid in full when you sign. This gives you the right to operate the franchise.
• Success Pack Purchase Franchisees must also buy a $15,000 Success Pack which includes branded furniture, office equipment, marketing materials, décor, and merchandise. Shipping, handling, and insurance are extra.

Discounts on the initial Franchise Fee may apply, such as:

• 50% off ($25,000) for first franchisees in a state
• 30% off for qualified teachers or school administrators
• 30% off for military veterans through VetFran

2. Ongoing Fees (Paid After Opening)

These are regular payments made to the franchisor:

• Royalty Fee The greater of: 8% of Gross Sales, or $2,200 per accounting period Collected automatically every month.
• Local Advertising Spend Franchisees must spend 3% of Gross Sales on approved local marketing. You report this monthly. If a National Brand Fund is created later, your local ad spend may be reduced.
• National Brand Fund (Optional Future Fee) Currently 0%, but the franchisor may introduce up to 3% of Gross Sales with 90+ days’ notice.

3. Other Possible Fees

These are not always charged, but can apply in specific situations:

• Training & Education - Fees may apply if you're required to attend extra seminars or programs.
• Equipment & Upgrade Requirements - You may need to update furniture or technology to meet brand standards costs apply as needed.
• Convention Fees - You may be charged to attend annual franchise meetings or conferences.
• Transfer Fee ($5,000) - Charged when you sell your franchise or transfer ownership.
• Renewal Fee ($5,000) - Payable when you sign a new agreement after your initial term ends.
• Additional Trainees (up to $500 each) - If extra people attend initial training beyond what's included.

4. Penalty Fees (If You Breach the Agreement)

These fees apply only if you default, terminate early, or break rules:

• Early Termination Damages Calculated as: Average royalty over past 12 months × (lesser of 24 months or the number of months left).
• Post-Termination Breach If you don’t follow exit rules, you'll owe 200% of the royalties you would have paid.
• Non-Compete Breach If you run a competing business, you may owe 15% of that business’s revenue per month.
• Non-Compliance Penalties $1,000 to $4,000 per violation — applies to brand standard breaches.
• Payment Default Penalties - Interest: 1.5% per month (or legal max), $50 late fee, NSF/failed payment fee: $100 per check or ACH failure
• Audit & Enforcement Fees If the franchisor has to investigate, re-train, or enforce compliance, you pay their expenses.

Franchisor Services and Assistance

Before and after a franchisee opens their business, the franchisor plays a key role in getting them up and running and helping them stay on track. In the case of Success Tutoring, here’s what support typically looks like:

1. Support Before Opening (Development Stage Assistance)

Before the business officially opens, the franchisor helps the franchisee prepare in several important ways:

• Site Review & Approval The franchisor reviews the proposed location to make sure it meets brand standards. They may also look at floor plans, layout, or design elements.
• Required Equipment & Setup Guidance The franchisor gives the franchisee a list of all required items to purchase — such as furniture, technology, signage, and supplies. They also specify which suppliers to use.
• Sale of the Success Pack & Approved Supplies The franchisor sells the official Success Pack and other required equipment, products, and branded materials. The franchisee is responsible for installing or stocking them at their expense.
• Initial Training for the Team Before opening, the franchisee’s team must complete initial training and Success Academy. Training covers daily operations, systems, standards, and delivery of services. Extra trainees may incur an additional fee.
• Brand Standards Manual Once training begins, the franchisor provides a digital copy of the Brand Standards Manual — the rulebook for operating the business.
• Opening Support A franchisor representative can assist during the setup and opening period to ensure everything meets expectations.
• Connection to Operating Systems The franchisee gets access to the Success Tutoring software and operating platform to run bookings, members, systems, and reporting.

2. Support After Opening (Operational Assistance)

Once the franchise is open, the franchisor may provide ongoing support at its discretion. Common forms of assistance include:

• Ongoing System Access The franchisor maintains the franchisee’s connection to the operating system, tech tools, and digital platforms.
• Marketing and Promotional Guidance The franchisor offers advice on local marketing, launch campaigns, media promotions, and display advertising.
• Access to Head Office Support Franchisor staff may be available by phone, email, or online communication for questions and advice. They may also visit the location when needed.
• Updates to Manuals and Trade Secrets Franchisees receive updates, additions, or new materials when brand standards evolve.
• Attendance at Conferences and Events Franchisors may invite franchisees to attend conventions, training sessions, or franchise network events to build knowledge and alignment. Some may be mandatory.
• Reviews and Compliance Visits The franchisor can conduct QSC (Quality, Standards & Compliance) reviews to ensure the business is meeting expectations.

Franchisee Obligations

When someone buys a franchise in the U.S.—like a Success Tutoring location—they’re not just buying a name. They’re agreeing to follow a set of rules, standards, and responsibilities that protect the brand and ensure consistency across every location.

Here’s what franchisees are generally required to do:

1. Site Selection & Approval

• Franchisees must find a suitable location and submit it to the franchisor for approval—usually within a set time frame (e.g., 90 days).
• The franchisor reviews the site but does not guarantee its success or profitability.
• Any lease or purchase agreement must be approved and documented.

2. Fit-Out, Equipment & Branding

• Franchisees must buy and install all the approved equipment, furniture, signage, and décor required by the franchisor.
• Items must come from franchisor-approved suppliers (or be approved in writing).
• The Success Pack and required technology systems must be set up before opening.

3. Training & Staffing

• The franchisee (or designated team) must complete initial training and any required refresher programs.
• The franchise must employ a full-time manager who meets brand standards.
• Staff must follow uniform, conduct, and customer service requirements.

4. Operations & Brand Standards

Franchisees must run the business in line with the franchisor’s operations manual, including:

• Pricing, services, and programs offered
• Hours of operation
• Customer service protocols
• Health and safety standards
• Technology and membership systems
• Optional or mandatory AI tools (if introduced)
• Participation in promotions, memberships, or loyalty programs

Any major deviation is considered a breach of contract.

5. Payments, Records & Reporting

Franchisees are responsible for:

• Paying royalty, marketing, and other required fees on time
• Reporting gross sales and customer data accurately
• Keeping proper books and financial records
• Submitting financial statements and tax documentation when requested
• Allowing audits, inspections, and reviews

Failing to report or understating revenue can trigger penalties or default.

6. Insurance Requirements

Franchisees must maintain the required insurance coverage and name the franchisor as an additional insured. They must:

• Provide certificates of insurance
• Renew coverage on time
• Pay all premiums and deductible amounts
• Allow the franchisor to secure coverage on their behalf if they fail to do so (at their cost)

7. Marketing & Local Promotion

• Franchisees must follow all advertising guidelines and only use approved branding.
• Depending on the system, franchisees may need to spend a minimum percentage of sales on marketing.
• Required signage and promotional displays must be kept visible and updated.

8. Maintenance & Appearance

• Locations must be kept clean, safe, and in brand condition at all times.
• Damaged or outdated equipment must be replaced promptly.
• The business must maintain proper signage, décor, and technology systems.

9. Technology & Data Requirements

Franchisees must:

• Use the franchisor’s software and reporting systems
• Protect customer data and follow PCI rules
• Maintain internet and backup connections
• Report sales electronically if required
• Allow franchisor access to systems and contact details

10. Legal & Compliance Responsibilities

Franchisees must:

• Follow all federal, state, and local laws
• Manage taxes, payroll, and licensing
• Handle customer complaints and crisis events properly
• Notify the franchisor of serious claims, injuries, or lawsuits
• Cooperate with investigations and audits

11. Cooperation With New Programs

Franchisees may be required to take part in franchisor-led initiatives, including:

• Membership programs
• Loyalty systems
• AI integrations
• National account agreements
• Gift card programs or new product rollouts

Refusing could be considered non-compliance.

The 2025 Franchise Disclosure Document isn’t just a legal requirement, it’s the roadmap for how a franchise relationship begins, operates, and is enforced in the United States. Whether you’re a new entrepreneur exploring opportunities with brands like Success Tutoring, or an established investor expanding your portfolio, the FDD gives you complete visibility into the fees, obligations, support, risks, territory rights, performance expectations, and legal protections involved. With franchising laws evolving and compliance standards increasing, understanding the FDD has never been more crucial. When examined clearly and in plain language, it becomes what it’s meant to be: a transparency tool that protects both parties and sets the foundation for long-term success in the U.S. franchise market.

Disclaimer: This is general information only and not legal advice. You should always seek independent legal, accounting, and business advice before making any decision.