Final answer:
The correct term for the document that finalizes the sale of a franchise is the franchise agreement. It delineates the rights and duties of the franchisor and franchisee, different from the franchise disclosure document that informs prospective buyers before the sale.
Step-by-step explanation:
The document that consummates the sale of a franchise is called the franchise agreement. This is a legal document that outlines the rights and responsibilities of both the franchisor and the franchisee. It includes details such as the duration of the franchise, the territory, the initial fees, the ongoing royalty and advertising fees, training and support, and the terms under which the franchise may be sold or transferred.
The franchise agreement is distinct from the franchise disclosure document (FDD), which is a legal document presented to prospective buyers of franchises in the pre-sale disclosure process. The FDD provides information about the franchisor, the franchise system, and the agreements that the franchisee will need to sign. It is designed to give potential franchisees enough information to make informed decisions about their investments.