Franchise Disclosure Document (Nigeria)
FRANCHISE DISCLOSURE DOCUMENT
Prepared by [Franchisor Name] | Date: [Disclosure Date]
NOTAP Registration No.: [NOTAP Reg Number]
THIS DOCUMENT CONTAINS IMPORTANT INFORMATION ABOUT THE FRANCHISE SYSTEM. READ IT CAREFULLY. YOU HAVE AT LEAST 14 DAYS FROM RECEIPT OF THIS DOCUMENT TO REVIEW IT BEFORE SIGNING ANY FRANCHISE AGREEMENT OR PAYING ANY NON-REFUNDABLE FEE.
ITEM 1 — FRANCHISOR IDENTITY
Franchisor: [Franchisor Name]
Registered address: [Franchisor Address]
CAC RC Number: [Franchisor RC]
TIN: [Franchisor TIN]
[Franchise System Description]
ITEM 2 — BUSINESS EXPERIENCE
[Key Management]
ITEM 3 — LITIGATION AND ITEM 4 — BANKRUPTCY
[Litigation Disclosure]
ITEM 5 — INITIAL FEES
[Initial Fees]
ITEM 6 — ONGOING FEES
[Ongoing Fees]
ITEM 7 — ESTIMATED INITIAL INVESTMENT
[Estimated Initial Investment]
ITEM 12 — TERRITORY
[Territory Description]
ITEM 13 — TRADEMARKS
[Trademark Details]
ITEM 14 — FINANCIAL PERFORMANCE REPRESENTATIONS
[Financial Performance Rep]
ITEM 18 — RECEIPT OF DISCLOSURE DOCUMENT
I, [Prospective Franchisee Name], acknowledge receipt of this Franchise Disclosure Document on [Disclosure Date].
I understand that I have at least 14 days from the date of receipt to review this document before signing any Franchise Agreement or paying any non-refundable consideration.
I confirm that I have not been subject to any undue pressure or inducement to sign this receipt or the Franchise Agreement before the expiry of the 14-day review period.
Franchisor
________________
Signature
Prospective Franchisee
________________
Signature
What Is a Franchise Disclosure Document (Nigeria)?
A Franchise Disclosure Document in Nigeria sets out the facts the maker formally declares for the purpose it serves.
The FDD serves as the primary instrument through which a franchisor makes full, fair, and accurate disclosure of all material facts a prospective franchisee needs to make an informed investment decision. A properly prepared Nigerian FDD discloses: the franchisor's corporate identity and ownership structure under the Companies and Allied Matters Act 2020 (CAMA 2020) as registered with the Corporate Affairs Commission (CAC) under Section 18 of CAMA 2020; the directors and officers of the franchisor and any prior insolvency proceedings; material litigation and regulatory proceedings including any Federal Competition and Consumer Protection Commission (FCCPC) enforcement actions under Section 17 of the Federal Competition and Consumer Protection Act 2018 (FCCPA 2018); all fees payable (initial franchise fee, royalties, marketing fund contributions, technology fees); the estimated total initial investment; supply chain obligations; the licensed territory; training and support; financial performance representations (if any); and the key terms of the Franchise Agreement.
The FDD must also disclose the NOTAP registration status under Section 4 of the Transfer of Technology (Registration etc.) Act Cap T14 LFN 2004 — mandatory for international franchise systems because without a valid NOTAP certificate, the Central Bank of Nigeria (CBN) Authorised Dealer bank cannot process Form A royalty remittances under the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act Cap F34 LFN 2004 — the withholding tax position under Section 81 of the Companies Income Tax Act (CITA Cap C21 LFN 2004), VAT obligations under the Value Added Tax Act Cap V1 LFN 2004 (as amended by the Finance Acts 2019, 2020, and 2021), trademark registrations at the Trademarks, Patents and Designs Registry (TPDR) under Section 5 of the Trademarks Act Cap T13 LFN 2004, and dispute resolution provisions referencing the Arbitration and Mediation Act 2023 and the Lagos Court of Arbitration (LCA).
The Nigerian Franchise Association (NFA), which coordinates with the Federal Ministry of Industry, Trade and Investment, recommends a minimum 14-day disclosure period before the franchisee signs any binding document or pays any non-refundable fee. Banks and development finance institutions including the Bank of Industry (BOI), the Development Bank of Nigeria (DBN), and the Bank of Agriculture (BOA), which provide SME franchise financing under CBN-mandated guidelines, typically require an FDD as part of their credit due diligence. The Securities and Exchange Commission (SEC Nigeria) may require additional disclosure under the Investment and Securities Act 2007 Cap I24 LFN 2004 where the franchise investment constitutes a collective investment scheme. The National Agency for Food and Drug Administration and Control (NAFDAC) and the Standards Organisation of Nigeria (SON) impose product-specific licensing requirements disclosed in the FDD under Items 8 and 11.
When Do You Need a Franchise Disclosure Document (Nigeria)?
A Franchise Disclosure Document (Nigeria) is needed at the outset of any franchise sales process in Nigeria — typically at least 14 days before the prospective franchisee signs the Franchise Agreement or pays any non-refundable fee, following the Nigerian Franchise Association (NFA) Code of Ethics best practice disclosure period.
International franchisors entering the Nigerian market through a master franchisee registered with the Corporate Affairs Commission (CAC) under Section 18 of CAMA 2020, or establishing company-owned units directly, are expected by Nigerian institutional investors, franchise development companies, and the NFA to provide an FDD consistent with the standards of the franchisor's home market. The Federal Competition and Consumer Protection Commission (FCCPC) under Section 17 of the Federal Competition and Consumer Protection Act 2018 (FCCPA 2018) monitors franchise sales processes for misrepresentation and unfair commercial practices.
A prospective franchisee considering investment in a Quick Service Restaurant (QSR) franchise — such as Domino's Pizza Nigeria (Food Concepts Plc), KFC (Famous Brands), Cold Stone Creamery, or Chicken Republic (UAC Restaurants Limited) — should request and receive an FDD before paying any booking deposit or signing any heads of agreement, to assess the NOTAP registration status under the Transfer of Technology Act Cap T14 LFN 2004 and Federal Inland Revenue Service (FIRS) withholding tax implications under Section 81 of the Companies Income Tax Act (CITA Cap C21 LFN 2004).
The Bank of Industry (BOI) and the Development Bank of Nigeria (DBN), which administer franchise financing facilities for Nigerian entrepreneurs under CBN-mandated SME financing guidelines, may require an FDD as part of their credit assessment. The Development Bank of Nigeria (DBN) operates under the DBN Act No. 2 of 2017. Without an FDD, the prospective franchisee cannot adequately satisfy the bank's due diligence requirements on the viability of the franchise investment or confirm the NAFDAC and SON product compliance status.
When a franchise system is acquired by a new parent company, or the franchisor undergoes a change of control — including a change of directors filed at the Corporate Affairs Commission (CAC) under Section 307 of CAMA 2020 — an updated FDD should be provided to all franchisees in Nigeria entering renewal and to new prospective franchisees.
The NOTAP registration process under Section 4 of the Transfer of Technology Act Cap T14 LFN 2004 requires the franchisor to disclose the technology, brand, know-how, and consideration payable to the National Office for Technology Acquisition and Promotion. The FDD contains substantially all the information NOTAP requires, and preparing a thorough FDD first streamlines the NOTAP application and CBN Form A approval process under the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act Cap F34 LFN 2004.
What to Include in Your Franchise Disclosure Document (Nigeria)
An effective Nigerian Franchise Disclosure Document must contain the following sections and disclosures to meet international best practice standards and Nigerian legal requirements.
Cover Page: The franchisor's full legal name, CAC RC number under CAMA 2020, registered address, FIRS Tax Identification Number (TIN), contact details, the NOTAP registration certificate number under Section 4 of the Transfer of Technology Act Cap T14 LFN 2004 (or confirmation NOTAP registration is pending or not required for domestic franchises), and the date the FDD was prepared. The cover page should also state the applicable FMDQ OTC Securities Exchange FX rate for fee calculations.
Item 1 — Franchisor Background: Corporate history, date of incorporation under Section 18 of CAMA 2020, parent company structure if part of a multinational group registered with the Corporate Affairs Commission (CAC), the nature of the franchise system, and the number of franchise units currently operating across Nigeria's 36 states and Federal Capital Territory and internationally.
Item 2 — Business Experience: Directors, officers, and key management of the franchisor with franchise industry experience, their roles, and relevant qualifications. Membership of the Nigerian Franchise Association (NFA) and any National Agency for Food and Drug Administration and Control (NAFDAC) directorships should be noted.
Item 3 — Litigation: All material civil, criminal, and regulatory proceedings in the preceding five years involving the franchisor, its affiliates, directors, or the franchise system — including proceedings before the Federal High Court, state High Courts, the Lagos Court of Arbitration (LCA), the Federal Competition and Consumer Protection Commission (FCCPC) under Section 17 of FCCPA 2018, the Central Bank of Nigeria (CBN), NAFDAC under the NAFDAC Act Cap N1 LFN 2004, the Standards Organisation of Nigeria (SON) under the SON Act No. 14 of 2015, and NOTAP.
Item 4 — Bankruptcy and Insolvency: Any insolvency proceedings involving the franchisor or its affiliates under Part F of CAMA 2020 before the Federal High Court, including any administration or receivership orders.
Item 5 — Initial Fees: Every payment required of the franchisee on signing and before opening, in Nigerian Naira (NGN) or USD, with a clear statement of refundability and the FIRS withholding tax position under Section 81 of the Companies Income Tax Act (CITA Cap C21 LFN 2004).
Item 6 — Ongoing Fees: Royalties, marketing fund contributions, technology fees, audit fees, and other recurring obligations in plain language with applicable VAT at 7.5% under the Value Added Tax Act Cap V1 LFN 2004 as amended by the Finance Act 2020.
Item 7 — Estimated Initial Investment: A detailed table of estimated minimum and maximum investment costs — site lease or acquisition under Section 22 of the Land Use Act 1978, fit-out, equipment, initial inventory, working capital, and training costs — in NGN.
Item 8 — Supply Restrictions: Any required purchases from the franchisor or affiliated entities and estimated annual spend, with Federal Inland Revenue Service (FIRS) transfer pricing implications under the Income Tax (Transfer Pricing) Regulations 2018 where applicable.
Item 13 — Trademarks: All trademarks registered at the Trademarks, Patents and Designs Registry (TPDR) under Section 5 of the Trademarks Act Cap T13 LFN 2004 that the franchisee will be licensed to use, with registration numbers and renewal dates.
Item 14 — Financial Performance Representations: Actual performance data from existing units (if the franchisor elects to make representations) with appropriate caveats under the Misrepresentation Act Cap M16 LFN 2004. The Securities and Exchange Commission (SEC Nigeria) requires adequate disclosure under the Investment and Securities Act 2007 Cap I24 where applicable.
Item 18 — Receipt: A detachable acknowledgement signed by the prospective franchisee confirming receipt of the FDD at least 14 days before signing the Franchise Agreement, consistent with the Nigerian Franchise Association (NFA) Code of Ethics. Forms-legal.com provides this Franchise Disclosure Document (Nigeria) template as a starting point for Nigeria-compliant franchise pre-sale disclosure — always review with a qualified Nigerian lawyer enrolled at the Nigerian Bar Association (NBA) before issuing to prospective franchisees.
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Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Franchise Disclosure Document (Nigeria) (Nigeria) [Legal document template]. Forms Legal. https://forms-legal.com/nigeria/business/contracts/franchise-disclosure-document-nigeria
"Franchise Disclosure Document (Nigeria) (Nigeria)." Forms Legal, 2026, https://forms-legal.com/nigeria/business/contracts/franchise-disclosure-document-nigeria.
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title = {Franchise Disclosure Document (Nigeria) (Nigeria)},
year = {2026},
howpublished = {\url{https://forms-legal.com/nigeria/business/contracts/franchise-disclosure-document-nigeria}},
note = {Free legal document template. Based on Companies and Allied Matters Act 2020 (CAMA 2020)}
}Also available for these jurisdictions:
Frequently Asked Questions
Nigeria does not have a statute that mandates the provision of a Franchise Disclosure Document before the sale of a franchise. Unlike the United States (FTC Franchise Rule 16 CFR Part 436), Australia (Franchising Code of Conduct 1998), Canada (provincial franchise legislation in Ontario, Alberta, Manitoba, New Brunswick, and Prince Edward Island), or South Africa (Consumer Protection Act 2008 franchise regulations), Nigerian law has not yet enacted franchise-specific disclosure legislation. However, the Transfer of Technology (Registration etc.) Act Cap T14 LFN 2004 and National Office for Technology Acquisition and Promotion (NOTAP) registration requirements effectively mandate disclosure of key commercial terms — including royalty rates, technology descriptions, and fee structures — to a government authority as a condition of processing cross-border royalty payments through a CBN-licensed Authorised Dealer bank. The Nigerian Franchise Association (NFA) Code of Ethics recommends pre-sale disclosure consistent with international standards. The Federal Competition and Consumer Protection Commission (FCCPC) under the Federal Competition and Consumer Protection Act 2018 (FCCPA 2018) may investigate franchise misrepresentations as unfair commercial practices. A franchisor that makes misrepresentations during the sales process may face claims under the Misrepresentation Act Cap M16 LFN 2004 or the general law of fraudulent or negligent misrepresentation before the Federal High Court or a state High Court.
A Nigerian Franchise Disclosure Document must provide a complete and transparent description of all fees payable by the franchisee. Item 5 (Initial Fees) must itemise every payment required on signing and before opening: the initial franchise fee (typically NGN 500,000 to NGN 5,000,000 for domestic franchises, or USD 10,000–100,000 for international brands), training fees, site selection fees, and any territory reservation fees, together with a clear statement of whether each fee is refundable if the franchise is not granted or the franchisee withdraws. Item 6 (Ongoing Fees) must describe in plain language all continuing financial obligations: the royalty rate (typically 4–8% of gross revenue in Nigerian franchise practice), marketing fund contributions (typically 1–3%), technology platform fees, audit fees, and renewal fees. All fees must be stated in Nigerian Naira (NGN) or, for international franchises, in USD with the exchange rate mechanism referenced to the CBN Investors' and Exporters' (I&E) FX Window rate. The FIRS withholding tax implication at 10% under Section 81 of the Companies Income Tax Act (CITA Cap C21 LFN 2004) on royalties paid to non-resident franchisors, and VAT at 7.5% under the Value Added Tax Act Cap V1 LFN 2004 on franchise services, must be disclosed. Transfer pricing compliance under the Income Tax (Transfer Pricing) Regulations 2018 should be flagged where franchisor and franchisee are related parties.
Item 3 of a Nigerian Franchise Disclosure Document must disclose all material litigation, arbitration, and regulatory proceedings involving the franchisor, its directors, officers, and the franchise system in the preceding five years. Disclosable proceedings include: civil actions filed by or against franchisees in the Federal High Court, state High Courts, or Magistrates' Courts; arbitration proceedings under the Arbitration and Mediation Act 2023 or the superseded Arbitration and Conciliation Act Cap A18 LFN 2004, including proceedings before the Lagos Court of Arbitration (LCA) or the Regional Centre for International Commercial Arbitration (Lagos); regulatory enforcement actions by the Corporate Affairs Commission (CAC) under CAMA 2020, the Federal Competition and Consumer Protection Commission (FCCPC) under FCCPA 2018, the Central Bank of Nigeria (CBN) under BOFIA 2020, or the National Agency for Food and Drug Administration and Control (NAFDAC) relevant to the franchise's products; criminal prosecutions involving any director or officer of the franchisor under the Criminal Code Act Cap C38 LFN 2004 (southern states) or the Penal Code (northern states); and any NOTAP disputes or findings under the Transfer of Technology Act Cap T14 LFN 2004. The disclosure obligation covers both pending and concluded proceedings and should state the outcome of concluded matters. Failure to disclose material litigation may expose the franchisor to misrepresentation liability under the Misrepresentation Act Cap M16 LFN 2004.
NOTAP registration under the Transfer of Technology (Registration etc.) Act Cap T14 LFN 2004 is the most significant Nigerian-specific regulatory step in the FDD process for international franchises. The National Office for Technology Acquisition and Promotion (NOTAP) — a federal government agency operating under the Federal Ministry of Science, Technology and Innovation — reviews all agreements involving the transfer of foreign technology, brand, know-how, or trade secrets to Nigerian entities before the Central Bank of Nigeria (CBN) will permit a CBN-licensed Authorised Dealer bank to remit royalties and franchise fees abroad. Practically, the FDD must disclose whether NOTAP registration has been obtained (and the certificate number), is pending, or is not required (for purely domestic franchise systems with no foreign technology element). NOTAP may require modifications to the fee structure during its review — particularly royalty rates it considers excessive under its benchmarks — and any such modifications will affect the financial terms disclosed in the FDD. The NOTAP certificate validity period typically matches the Franchise Agreement term, and renewal of NOTAP registration must be addressed in the FDD's ongoing compliance section. Banks such as Zenith Bank, First Bank of Nigeria, and Access Bank, acting as Authorised Dealers, will require sight of the NOTAP certificate before processing any cross-border royalty or franchise fee payment under Form A of the CBN Foreign Exchange Manual 2018.
Item 14 of a Nigerian Franchise Disclosure Document may contain financial performance representations (FPRs) — information about actual or projected revenues, earnings, or profits of franchised or company-owned units — but only if the franchisor has a reasonable basis for the representations and can substantiate them with data. Nigerian law, through the Misrepresentation Act Cap M16 LFN 2004 and the general law of fraudulent and negligent misrepresentation applied by the Federal High Court and state High Courts, creates liability for false statements made during pre-contractual negotiations. An FPR based on verified actual performance data from existing Nigerian units — with appropriate caveats that past performance does not guarantee future results, that individual results will vary based on location, management, and market conditions across Nigeria's 36 states and FCT — is permissible. Projections that have no reasonable evidential basis, or that present best-case scenarios without disclosing the assumptions, expose the franchisor to claims for rescission of the Franchise Agreement and damages. Where no FPR is included, the FDD must state this clearly. Forms-legal.com provides this Franchise Disclosure Document (Nigeria) template as a starting point — always review with a qualified Nigerian lawyer before providing to prospective franchisees.
If a prospective franchisee in Nigeria signs a Franchise Agreement without receiving an FDD and the franchisor made material misrepresentations during the sales process, the franchisee may have grounds to seek rescission of the agreement and recovery of payments made under the Misrepresentation Act Cap M16 LFN 2004 or the Federal Competition and Consumer Protection Act 2018 (FCCPA 2018), which gives the Federal Competition and Consumer Protection Commission (FCCPC) jurisdiction to investigate unfair commercial practices. The absence of an FDD does not automatically void the Franchise Agreement under Nigerian contract law — the agreement remains binding unless it can be set aside on grounds of misrepresentation, unconscionable conduct, or duress. However, the franchisee's inability to conduct proper due diligence due to non-disclosure may support a claim for damages for wasted investment assessed by the Federal High Court or state High Court. The Bank of Industry (BOI) and the Development Bank of Nigeria (DBN), which provide franchise financing to Nigerian SMEs, typically require an FDD as part of their loan due diligence, so the absence of an FDD may also affect the franchisee's ability to secure financing for the business. Dispute resolution through the Lagos Court of Arbitration (LCA) or the Lagos Multi-Door Courthouse (LMDC) is available as an alternative to litigation.
A Franchise Disclosure Document (Nigeria) does not legally require a lawyer in Nigeria, though professional legal advice is strongly recommended. The Companies and Allied Matters Act 2020 (CAMA 2020), administered by the Corporate Affairs Commission (CAC), governs the corporate disclosures required. The Transfer of Technology Act Cap T14 LFN 2004 requires NOTAP registration disclosure. The Misrepresentation Act Cap M16 LFN 2004 and the Federal Competition and Consumer Protection Act 2018 (FCCPA 2018) impose liability for false representations. The Federal Inland Revenue Service (FIRS) administers withholding tax and VAT obligations on franchise fees. The Trademarks Act Cap T13 LFN 2004 governs trademark licence disclosures. Forms-legal.com provides this Franchise Disclosure Document (Nigeria) template as a starting point — review with a qualified Nigerian lawyer enrolled at the Nigerian Bar Association (NBA) with franchise law experience before issuing to prospective franchisees, particularly for cross-border arrangements involving NOTAP registration.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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